13
OVERVIEW
MID-YEAR OUTLOOK 2022
CITI GLOBAL WEALTH INVESTMENTS
The earthquake and aftershocks that struck the
world economy in 2020 have yet to pass. An
unprecedented COVID collapse was followed by
a boom in economic activity, financial assets and
consumer prices. These rapid and exogenous
developments have left a confusing picture for
investors in 2022.
As David Bailin discusses in A new world order:
How should I invest now?, the tragedy of war
in Ukraine has intensified the challenges of a
pandemic-scarred global economy, particularly
shortages and supply chain disruption. Amid
the fading afterglow of last year’s boom, today’s
situation requires us to allocate capital differently
in a world of commodity and goods scarcity.
Jan 2022 = 100
Durable demandDiscretionary demand
Jan ‘21 Apr ‘21 Jul ‘21 Oct ‘21 Jan ‘22 Apr ‘22
135
90
105
120
Source: Haver and Office of the Chief Investment Strategist, as
of 18 May 2022. All forecasts are expressions of opinion, are
subject to change without notice, and are not intended to be a
guarantee of future events.
Chart shows performance of “discretionary” and “durable” demand industries. Discretionary demand industries are household
durables, specialty retail, textiles, apparel & luxury goods, residential REITs, hotels, restaurants & leisure, financials and airlines.
Durable demand industries are food, beverage & tobacco, energy, utilities, healthcare and telecommunication services. Source: Haver
Analytics and Bloomberg, as of 15 May 2022. Past performance is no guarantee of future returns. Real results may vary. Indices are
unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only.
Figure 1. Then and now:
Our real GDP forecasts (%)
Figure 2. Durable demand, equity resilence
During the first half of 2022, rapidly rising
interest rates left investors more uncertain as to
how to value financial assets. The rough doubling
in government bond yields in the past twelve
months has restored higher quality fixed income
to a more appropriate yield level for the first time
in several years.
Given a slowing cyclical backdrop, we see a much
more compelling opportunity in fixed income
assets for both overall portfolio construction and
to earn income on surplus cash – see Beat the
cash thief: Bonds are back and Our positioning.
exogenous shocks from the economy’s normal
business cycle. Policymakers have treated both
the COVID collapse and recovery with the same
medicine, excessive stimulus and potentially
excessive tightening. In our view, central bankers
are now running their enormous monetary
stimulus of 2020-2021 “in reverse.” Slower growth
is upon us even before the Fed raises rates again
this summer. We have revised our real global
GDP forecast about a full percentage point lower
for both 2022 and 2023 – FIGURE 1. Commodity
shortages have – and will – restrain growth and
raise inflation. But there are countervailing
factors at play, too.
Unintended side-effects
The Federal Reserve’s macroeconomic strategy
has, so far, failed to differentiate a series of large
2020 2021 2022 2023
PREV. REVIS. PREV. REVIS.
CHINA 2.4 8.0 4.5 4.0 5.0 5.0
US -3.4 5.5 3.5 1.9 2.6 2.0
EU -5.9 4.8 3.9 2.3 2.4 1.8
UK -9.7 6.0 4.2 3.0 2.5 2.0
GLOBAL -3.2 5.6 3.8 2.6 3.5 2.7
We see an ongoing supply recovery and
incipient demand slowdown leading to a gradual
deceleration of inflation over the coming year.
我的内容管理
展开
