For financial professionals in Belgium

Equities: choppy waters likely until policy path becomes clearer

Equity markets have sold off on uncertainty around how quickly and how far the US Federal Reserve (Fed) will have to go to curb inflation in the US but Director of Research Matt Peron says once the outlook becomes clearer – which could take until the middle of 2022 – smoother sailing could return.

Key Takeaways

  • The Fed’s shift in posture on inflation and how aggressive it may need to be to combat it has contributed to significant volatility as market participants question how the economy will respond to rising rates.
  • Strong company earnings remain a bright spot, something we expect to continue – unless rates move too far or too fast – and US companies may be near-term beneficiaries of the policy shift.
  • While volatility will likely continue in the first half of 2022, we expect a smoother second half of the year as the Fed’s policy path becomes clearer.
Matt Peron

Matt Peron

Director of Research | Portfolio Manager


31 Jan 2022

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

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Matt Peron

Matt Peron

Director of Research | Portfolio Manager


31 Jan 2022