Brian Belski’s 2022 U.S. Market Outlook
Brian Belski’s 2022 U.S. Market Outlook
Chief Investment Strategist
Brian, Chief Investment Strategist and leader of the Investment Strategy Group, provides strategic investment and portfolio management advice to both institutional …
Brian, Chief Investment Strategist and leader of the Investment Strategy Group, provides strategic investment and portfolio management advice to both institutional …
VIEW FULL PROFILE-
Minute Read
-
Listen
Stop
-
Text Bigger | Text Smaller
In his 2022 U.S. market outlook, BMO Capital Markets’ Chief Investment Strategist Brian Belski explains why, even amid concerns around inflation and rising interest rates, the corporate earnings and economic environment are providing a solid backdrop for equities.
Watch Brian's North American market outlook.
Hello
This is Brian Belski, Chief Investment Strategist at BMO Capital Markets
We believe US stocks will post their fourth consecutive year of positive returns in 2022 – albeit less positive – but that is OK and very normal
Our models show that the S&P 500 Index will attain a price objective of 5,300 on earning of $245
To clarify even further, we believe this “less positive” trend does not only apply to price performance – but also less positive earnings growth and diminished valuations – not to mention, a slowing trajectory of rising interest rates – and yes – the strong possibility of decelerating inflation – especially during the second half of 2022
Simply stated, double digit earnings growth, still excessively low interest rates, declining valuations and eventually subdued inflation is a very good backdrop for equities
Remember, equities are traditionally the best inflation hedge – and yes, stocks can, will and should go up alongside interest rates – after all, rising bond yields means the economy is improving – which the stock market has already been telling us thanks to its powerful rally the past few years in particular
In terms of positioning, over the next 12-18 months, we are advising clients to Overweight the following in their equity portfolios: Financials, Discretionary, Industrials and Materials, while equal weighting both growth and value, let alone small, mid and large cap stocks
However, clients are encouraged to differentiate these positions by increasing their focus on quality, growth-at-a-reasonable-price and dividend growth across all size, styles and sectors
Taking a bit of a longer-term picture, we still believe US stocks remain in a 20-25 year bull market, with the return structure of stocks over the next 3-5 years becoming more normalized to the tune of high single to low double digit returns – with longer-term time horizons led by sectors like Technology, Communication Services, Discretionary and Financials
Yes, the past few years have been nothing short of exciting and very positive for US investors – but as markets, let alone society itself begins to normalize and moderate over the next few years as the great unwind of the COVID19 pandemic ensues, we continue to focus on the positive – because after all, positive is still positive.
Define the Future
PART 2
The Current and Future State of the Global Supply Chain
Fadi Chamoun, CFA February 17, 2022
BMO recently held an event to discuss the current state of supply chain bottlenecks, strategies for managing the crisis and when we can exp…
PART 3
Why SLLs Have Only Just Begun to Roar
John Uhren March 01, 2022
When Enbridge Inc. launched its inaugural C$1bn Sustainability Linked Loan (SLL) in February 2021, it marked a milestone not only for the c…
PART 4
Amid the Pandemic, Market Structure Continues to Evolve
None April 01, 2022
Change is on the horizon for electronic trading as the U.S. Securities and Exchange Commission revisits regulatory reforms in a market that…
PART 5
State of the Union: What Lies Ahead
Brian Belski, David Jacobson, Michael Gregory, CFA April 21, 2022
Russia’s invasion of Ukraine has brought uncertainty to domestic and foreign policy as well as to the economy and the markets. It com…
PART 6
New Normal Yet to Come for Metals Prices: BMO Mining Panel
Colin Hamilton May 12, 2022
Prices for base and industrial and precious metals are flying high, but experts gathered at this year's BMO Global Metals and Mini…
PART 7
Amid the Supply Chain Woes, Supplier Wellness Takes Center Stage
Reg Butler June 02, 2022
There have been plenty of headlines about how backlogs in the supply chain are causing headaches for both companies and consumers. Those ch…
PART 8
Key Takeaways on Ag, Food, Fertilizer & ESG from BMO’s Farm to Market Conference
Dan Barclay May 26, 2022
Join BMO’s Dan Barclay, Bert Powell, Joel Jackson, Ken Zaslow and Doug Morrow in this special episode from BMO’s IN Tune Podcas…
PART 9
M&A Markets Active Despite Macroeconomic Backdrop
Warren Estey May 19, 2022
As much as deal-making has cooled in 2022 - dampened by market volatility, geopolitical uncertainty, the ongoing fight against COVID-19 and…
PART 10
Private Capital Seizing the Stage in U.S. Middle Market
Grant Thompson August 04, 2022
Move over public markets, because there’s a new kid in town - well, sort of. It’s called private capital, and while it may h…
PART 11
Supply Chain Disruption: Key Challenges and Opportunities
Fadi Chamoun, CFA September 01, 2022
New look, same great content! We’re proud to launch Markets Plus, our new podcast, where leading BMO experts share a wealth of timely…
PART 12
Achieving Returns in an Accelerating AI Environment
David Wismer October 19, 2022
From improvements in Machine Learning and the development of new database systems to the development of sector-specific tools, significant …
PART 13
North American Investment Strategy: 2023 U.S. Market Outlook
Brian Belski December 21, 2022
While 2022 has been “a year we’d like to forget,” 2023 will be the start of the multiyear trend toward normalization. In …
PART 14
Managing and Monetizing Your Transition to a Net Zero World with BMO and Radicle
Eric Jacks December 01, 2022
When Calgary-based Radicle Group Inc. was formed in 2008 in Alberta as the first North American compliance market, the climate change narra…
PART 15
The Importance of Financial Forecasting
February 22, 2023
Forecasting and predicting the future. They’re the same thing, right? Not really. We all make predictions at some point. Many of u…
PART 16
Why Water Access Should Be Part of Your Risk Metrics
April 20, 2023
In the current tally of key risks and mitigants it’s easy to feel that the risk side of the equation is having a banner era; with bus…
PART 17
Understanding the Link Between Cybersecurity and ESG
John Uhren, Andrew Matheou February 02, 2023
John Uhren is joined by Andrew Matheou, Head of BMO Capital Markets Global Transaction Banking, to discuss the topic of cybersecurity, and …
