2022 will mark the end of the pandemic and a full economic recovery, says JPMorgan

“Our vision is that 2022 will be the year of a full global recovery, an end to the global pandemic and a return to normalcy we had before the Covid-19 eruption,” Marko Kolanovic said. JPMorgan sin (JPM)head of global markets, wrote in a note to customers on Wednesday. “This is justified by achieving broad population immunity and using human ingenuity, such as new therapies that are expected to be widely available in 2022.”

America’s largest bank expects progress on the health front to trigger a “strong”[ads1]; improvement in the economy, marked by a return to global mobility and robust spending by consumers and businesses.

The better economy is good news for the banks

JPMorgan predicts continued growth for the stock market, albeit at a slower pace. The bank set an end-of-year target of 5,050 for the S&P 500, up by 8% from the current level.

“By 2021, economies around the world are making great strides toward recovery and reopening,” Kolanovic wrote. “However, much remains to be done as recovery was uneven, incomplete and often interrupted by new virus outbreaks and horrors.”

Despite vaccines, natural immunity and health restrictions, the “human strain” of Covid has been greater this year than last year, JPMorgan noted. But it warns that there are obstacles ahead, including the abolition of simple monetary policy by central banks.

“As the recovery picks up, markets will begin to adjust to tighter monetary conditions, a process that is likely to inject volatility,” Kolanovic wrote, adding that this shift will be a “headwind” for richly valued markets such as Nasdaq.

Other risks identified by JPMorgan include geopolitical tensions in Europe and Asia, uncertainty over high inflation and a “looming energy crisis.”

While Citigroup on Tuesday predicted that US oil prices will average only $ 59 per barrel in the fourth quarter of next year, JPMorgan remains optimistic about energy, saying it expects crude oil to stand at $ 86 per barrel by the end of 2022 and Brent, the world benchmark index. , will be at $ 90.

Source link

Back to top button