Skip to main content
logo
  • Investment Strategies

    Investment Options

    • Alternatives
    • Beta Strategies
    • Equities
    • Fixed Income
    • Global Liquidity
    • Multi-Asset Solutions

    Capabilities & Solutions

    • ETFs
    • Pension Strategy & Analytics
    • Global Insurance Solutions
    • Outsourced CIO
    • Sustainable investing
  • Insights

    Market Insights

    • Market Insights Overview
    • Eye on the Market
    • Guide to the Markets
    • Guide to Alternatives
    • Market Updates
    • Guide to China

    Portfolio Insights

    • Portfolio Insights Overview
    • Alternatives
    • Asset Class Views
    • Currency
    • Equity
    • ETF Perspectives
    • Fixed Income
    • Long-Term Capital Market Assumptions
    • Sustainable Investing
    • Strategic Investment Advisory Group

    Retirement Insights

    • Retirement Insights Overview
    • Essential Elements of a Sound Retirement System
    • Building Better Retirement Portfolios
  • Resources
    • Center for Investment Excellence Podcasts
    • Insights App
    • Library
    • Webcasts
    • Multimedia
    • NEW Morgan Institutional
  • About us
    • Corporate and Social Responsibility
  • Contact Us
  • English
  • Role
  • Country
  • Morgan Institutional
    Search
    Search
    Menu
    You are about to leave the site Close
    J.P. Morgan Asset Management’s website and/or mobile terms, privacy and security policies don't apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. J.P. Morgan Asset Management isn’t responsible for (and doesn't provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the J.P. Morgan Asset Management name.
    CONTINUE Go Back
    1. Introducing the Q1 Guide to the Markets

    • LinkedIn Twitter Facebook

    Introducing the Q1 Guide to the Markets

    05/01/2022

    Karen Ward

    1Q 2022 | Guide to the Markets

    05/01/2022

    DOWNLOAD THE LATEST GUIDE


    The economic tailwinds are strong and monetary tightening won’t derail the recovery

    In 2022 we do not see any shortage of desire to spend. Households have accumulated savings over the pandemic and rising asset prices have resulted in a jump in net wealth (Guide to the Markets – Europe pgs 10 & 18). Companies are investing and governments have already set in train multi-year spending plans (pgs 17, 26, 33). In the near-term, ability to spend may be constrained by restrictions needed to contain the spread of Omicron. However, demand looks likely to be diverted and delayed but, importantly, not destroyed. With inflation pressures lingering, particularly in the labour market (pgs 24, 28, 37), central banks will begin raising interest rates but not by enough to hamper growth (pg 9).


    Costs won’t stop profits growing

    Strong nominal growth should support another good year for corporate earnings globally. Cost pressures are likely to remain elevated but in large part we expect companies to pass these on to end consumers and protect their margins, as we saw in 2021 (pgs 13 & 64). Current consensus forecasts for earnings in most major regions look too modest in our view (pg 46).


    Value offers value

    A broadening economic recovery and rising interest rate environment has the potential to change the patterns of market leadership from those observed in recent years. World growth stocks currently trade at a price-to-earnings ratio of 29.3 compared to value at 13.5 (pg 51). Value stocks should have scope to perform well if the macro backdrop plays out as we anticipate. This would argue for a more geographically diverse portfolio compared to the last two years when growth dominance heavily favoured the US.


    China remains a compelling opportunity

    In 2021 investors were unnerved by concerns about the Chinese property market and several regulatory announcements from Beijing. Our interpretation is that these reflect a desire to see more sustainable and inclusive growth, albeit at a lower level (pg 45). The spread of Covid may weigh on economic activity in the near term, but the medium-term outlook for corporate earnings is still compelling and valuations are now attractive given the reset last year (pg 46).



     

    0903c02a828686f2

    J.P. Morgan Asset Management

    • About us
    • Investment stewardship
    • Privacy policy
    • Cookie policy
    • Complaint Resolution
    • Sitemap
    J.P. Morgan

    • J.P. Morgan
    • JPMorgan Chase
    • Chase
    Opens LinkedIn site in new window

    READ IMPORTANT LEGAL INFORMATION. CLICK HERE >

    The value of investments may go down as well as up and investors may not get back the full amount invested.

    Copyright 2023 JPMorgan Chase & Co. All rights reserved.