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The experts’ take on the financial markets in 2022: Will this year’s streak continue?

Nov 10, 2021

Redacción Mapfre

The key indexes are showing returns of more than 20%. What can we expect in 2022? And, in the specific case of the Ibex 35, which has lost 10 points compared to Europe in 2021, will its performance improve? According to 8 out of 10 analysts and managers, next year will be good, but not as good as this one. The opinion on the forecast for Spain is more divided: 57% of those surveyed believe Spain can outperform Europe next year, but that depends on inflation, supply chains and the direction of monetary policy. These are the results of an elEconomista survey of 21 investment firms on the market performance they anticipate for next year, in which José Luis Jiménez, the Group’s Chief Investment Officer, participated on behalf of MAPFRE. His opinions can be found below:

Will 2022 be better or worse for the stock market than 2021? At first glance, it’s hard to imagine the stock market improving after the major rebound that followed the pandemic. Neither the macroeconomic situation–with rising inflation and the possible upcoming change in the monetary policy cycle–nor the political situation justify a very positive scenario.

Can Spain do better than Europe in 2022?That seems unlikely in view of the budget forecasts for next year. Deficit and debt figures are likely to continue growing due to lower revenues, and risks of expenditure slippages have also started to emerge. In addition, there are other internal and external uncertainties, such as the energy situation and the global transportation and semiconductor crisis, which could threaten recovery. On the other hand, Italy's significant improvement, with the government of Mario Draghi and its recovery plan, places us in a relatively worse position. We cannot rule out the possibility of the Italian bond having lower returns than ours again.

Records, risks, and reasons for caution (and optimism) in the markets

In the third quarter, U.S. equities extended their post liberation day advance, especially in the case of small caps.

How to invest with the stock market at maximums?

We are facing a high price scenario, in which questions for investors arise: Should one enter a market that is already “expensive,” or wait? Should you hold your investments, or is it time to sell? MAPFRE experts explain that being in a moment when stock markets are at record highs should not deter investment if we have a long-term outlook—the most suitable for retail investors—and good diversification.

Fed Highlights “High Prices” in Equities: Are We Facing a Bubble?

The U.S. Federal Reserve has dominated much of the economic and financial discussion in recent weeks, largely due to the debate over possible rate cuts, which were confirmed last week. On Tuesday, Chair Jerome Powell again drew attention by referring in a speech to the “fairly high” prices in U.S. equities. With Wall Street at historic highs, the question arises whether we are dealing with an equity bubble.