Here’s (Almost) Everything Wall Street Expects in 2022

Get ready for less of the same.

As 2022 begins, the overriding message from almost 50 financial institutions across Wall Street and beyond is that conditions still look good, but the rip-roaring rallies powered by the reopening are history. Growth will ease. Returns will moderate. Risks abound—but so do opportunities.

For the fourth year, Bloomberg News has collated and condensed the key views from dozens of investment outlooks and presents more than 500 of them below. They can be sorted by institution, asset or theme.

One topic dominates: “Inflation” is the most frequently cited term in our selected calls, appearing 224 times. Unsurprisingly, it’s often paired with a word like “higher” or “rising.” AXA Investment Managers describes it as “the key concern” for 2022, and surging prices hang over nearly every scenario envisaged by the Wall Street prognosticators.

While firms are divided over how transitory inflation will ultimately prove—with many expecting it to ease alongside supply chain pressures—that very uncertainty feeds a consensus that one of the biggest risks this year will be monetary policy missteps. For Fidelity, “the margin for error will be fine, making the probability of policy mistakes high.”

The expectation is for policy to tighten and yields to rise, and variations of the terms “rising rates” and “higher yields” appear throughout. With bond returns expected to be negative, fixed-income trades veer into ever-more complicated territory, like collateralized loan obligations—which Federated Hermes touts for their “complexity premia.”

Part of the issue is that valuations are elevated “for all major asset classes relative to history,” according to Goldman Sachs. That feeds into the “less of the same” mantra coined by Pictet Asset Management. When everything already looks expensive, the expected upside is smaller. Single-digit stock returns are the broad consensus.

“Covid” gets just 36 mentions in our selected calls. As BNY Mellon Wealth Management puts it, the hope is that vaccines mean the world is “turning the corner from pandemic to endemic.” The word “China” appeared more than twice as often, with a slowdown in the world’s second-largest economy seen as a major risk. Unpredictable domestic policy out of Beijing was a frequently cited headache, while the likes of Bank of America flag the “extreme downside risk” of a flare up over Taiwan.

For all that, a handful of names including Goldman Sachs argue China isn’t yet “uninvestable.”

Meanwhile, countless pages were dedicated to environmental, social and governance investing, though specific strategies were hard to come by. And despite a blockbuster year, scant attention was paid to digital assets. In the words of JPMorgan Asset Management: “Despite media hype and sharp price rises, crypto is not yet established as a portfolio asset.”