Muted Gains Seen for S&P 500 in 2022, Deutsche Bank Survey Shows

(Bloomberg) -- Investors expect muted returns from U.S. stocks in 2022 amid slowing growth and higher inflation, according to a Deutsche Bank AG survey, adding to signs of a darkening outlook after this year’s rally in equities.

About a fifth of the more than 750 respondents to the global poll anticipate negative returns for the S&P 500 index, while average expectations for a 4.2% gain would make 2022 the third-worst year of the last decade, according to Deutsche Bank. Most respondents expect U.S. and European economic growth to be below Street consensus of around 4%, according to the poll carried out this week, bank strategists led by Jim Reid said in a note on Friday.

The results are consistent with a Bloomberg survey of equity strategists last month which showed an average target of 4,843 for the S&P 500 at end-2022, implying upside of around 3.8% from current levels. The estimates compiled showed a 20% range between the highest and lowest forecasts -- the second-widest in a decade, reflecting growing uncertainty as the post-pandemic economic rebound moves past its peak.

“The average respondent still thinks U.S. inflation will be running almost 2% above target,” Deutsche Bank strategists wrote, summarizing the survey results. “A solid majority expects two Fed rate hikes next year.”

©2021 Bloomberg L.P.