There are only 40 days of 2021 to go... WHAT?! Today our analysts are looking at 5 finance predictions for 2022. If that sounds interesting, stick around. We’ll also give you an overview of the key fundamental events coming up over the next week.
What Could Happen In 2022?
You’re probably well aware that the term “prediction” is exactly that, but just in case… The following predictions are purely speculative and have no guarantees for any kind of financial return.
You have been warned!
#1 Meme investing will dominate crypto
Since the start of 2021, the value of the popular meme coin, DOGE, has risen by over 14,000% and then plummeted by almost 60%. The success of the coin earlier this year even saw it win famous backers, such as Snoop Dogg, Gene Simmons and Elon Musk.
In the past few weeks, however, DOGE has been surpassed in value by another meme coin, SHIBA INU. At the time of writing, this token has a market cap of over $25 billion and is the 11th most popular crypto by trading volume.
More and more of these tokens are popping up and becoming successful on the back of very little other than pure speculation. There’s a lot of evidence pointing to the fact that crazy volatility in crypto tokens that have no real-world use case beyond giving people a giggle might not be so unusual in 2022.
#2 The S&P will continue to rise
According to Factset, the S&P 500 will see a price increase of 14.8% over the next 12 months. The communications industry will be particularly successful, having been forecasted to see an 18% increase.
How reliable are these projections? More reliable than you might think, perhaps. Over the past 10 years, industry analysts have overestimated the price of the index by just 0.8% on average.
#3 Covid aftermath will continue… with a silver lining
Probably the least shocking prediction on our list, covid-19 and specifically government enforced lockdowns have had a massive effect on the economy. And that isn’t going away anytime soon.
The supply crisis that has pinned back growth and boosted inflation this year could easily continue or worsen.
Morgan Stanley said it thinks US inflation will move “decisively lower” next year while remaining above the Federal Reserve’s 2% target. Continuing that it “will get worse before it gets better”.
In bouncier/fluffier news , Morgan Stanley has also predicted that the US economy will expand by 4.6% next year, a boost on its 5.5% growth in 2021.
#4 Bitcoin will lose its crypto crown
For the first time ever, we could see another crypto sitting on the throne. And that crypto? Yep, you guessed it, Ether!
After a crazy successful 2021, Ethereum is now a clear and present threat to Bitcoin’s dominance. Ether has grown by over 474% this year and it shows no sign of stopping.
That price rise isn’t just speculation, either. It’s come along with a surge of interest in blockchain-based decentralised finance (DeFi) and non-fungible tokens (NFTs), both largely built on top of Ethereum’s network.
Bitcoin is a store of value, like digital gold, but its technology is not really utilised in real-world scenarios. If real-world solutions continue to be built using Ethereum’s blockchain, the potential for growth in ETH market cap and price is quite incredible.
#5 FAANGT will continue to show its teeth
The FANGT+ Index, which includes the FAANG companies (Facebook, Apple, Amazon, Netflix, Google and TESLA) and high-performing tech companies (Alibaba, Baidu, NVIDIA, Twitter) is up over 26% in 2021, and a massive 285.4% over the last five years.
These companies have weathered the pandemic and resulting supply crisis with incredible skill, dare we say, ease. They’ve continued to post strong growth numbers and their stock price has steadily risen throughout.
There’s no sign that the success of these companies will let up in 2022.
Share your 2022 predictions with us by tweeting us at @_contentworks; and if you’re looking for regular and insightful fintech marketing content, please consider following us!
What’s on the trading agenda week commencing 22/11/21?
A busy week lies ahead for the currency markets. Here are all of the top events to take note of.
● No major events scheduled.
● USD — Markit Manufacturing PMI Flash (NOV)
● NZD — Interest Rate Decision
● USD — Durable Goods Orders MoM (OCT); Core PCE Price Index YoY (OCT); Michigan Consumer Sentiment Final (NOV); FOMC Minutes
● EUR — German GDP Growth Rate YoY Final (Q3); German GfK Consumer Confidence (DEC)
● No major events scheduled.
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The Contentworks team