![]() "It's not that outrageous", he told us, pointing out at to a possible energy crisis this winter combined with supply chain issues, rising rents and crucially, wages going through the roof. Still, we asked Steen Jakobsen, Chief Economist and CIO at Saxo Bank how outrageous a prediction of U.S. Now, of course, Saxo Bank stresses that its "Outrageous Predictions" are by no means a forecast of what's to come but rather a deep dive in 'known unknowns' or whatever could constitute a black swan for financial markets. inflation could spiral to 15% in 2022 fuelled by surging wages. Well, according to Saxo Bank's yearly "Outrageous Predictions" research note which just came out, U.S. While the outlook for 2022 is murky as ever, courtesy of the Omicron variant, there's a few things at least that got clarified in the final weeks of 2021.įirst and foremost, the 'transitory inflation' narrative has been officially ditched by the Fed and there's a clear consensus that rising prices are now a key threat for next year, as was highlighted by the OECD yesterday.Ĭonsumer price in the euro zone accelerated to 4.9% in November, by far the highest level in last 25 years and the Fed's preferred inflation measure surged by the most in nearly 31 years on an annual basis in October. INFLATION: HOW OUTRAGEOUS IS THAT? (1210 GMT) The Nasdaq is also up 23.2% versus 20.2% for the S&P 500.ġ5% U.S. That being said, the sector is still up 29% so far in 2021, short but close to double the pace of the broader European market. ![]() With rates rising fast, it does seem that investors are no longer willing to pay the same premium for growth stocks.Ĭoincidently in Europe this morning, the tech sector is down over 4% and on course for its second worst session of the year. "Indeed, only recently I noted that despite US IT's EPS relative now declining sharply, its nosebleed PE valuation at 30x looks vulnerable vs the market’s 22x - the widest gap since the Nasdaq bubble", he argued. "I have a similar feeling that in a decade’s time FAANGs (and US tech generally) will go the way of the BRICs as another example of acronym investing going horribly wrong", he said. "BRICs have indeed been terrible investments over the past decade, underperforming both MSCI World and even the EAFE index by a very wide margin", he wrote in a note today about the famous acronym for Brazil, Russia, India and China. ![]() The permabear believes FAANGs could have the same fate as BRICS (which he then called 'Bloody Ridiculous Investment Concept') a decade ago. Looking a bit beyond next year and towards the decade to come, SocGen strategist Albert Edwards believes the great trade of the 2010s might no survive the 2020s.
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