Stocks Should Build on Gains in 2022, Markets Live Survey Says

(Bloomberg) -- The S&P 500 will probably end next year with a gain, while yields on 10-year Treasuries and the price of oil will climb as well. That’s according to nearly 900 Bloomberg Terminal clients who responded to a survey conducted by our Markets Live blog in the first two weeks of December.

Feedback came from 873 people around the world, with about 48% of replies coming from the Americas, 40% from Europe, the Middle East and Africa, and 12% from Asia. More than half of respondents engage with markets as a portfolio manager or trader, with the balance involved in research, sales, management or some other function.

The mean prediction for the S&P 500 was a price of 4,701, which would have been a gain of about 1.4% from an average price of 4,636 during the survey’s time period. The index shed 3% in three days, closing at 4,568 on Monday. Other predictions include 10-year Treasury yields at 1.85%, WTI crude oil at $74 a barrel, the euro at 1.14 to the dollar, gold at $1,812, and the dollar-yuan at 6.46. 

It’s interesting that for the S&P 500, the euro, the yuan, gold and crude, the year-end average forecast was roughly a quarter of a standard deviation or less away from the levels holding during the survey, perhaps as respondents anchored their projections around prevailing rates. The view for 10-year Treasury yields was a notable exception, as was the forecast for U.S. inflation, which came in at an annual rate of 3%, a bit above economists’ expectations of a headline CPI that drops back to 2.8% by next December, from 6.8% in November.

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The S&P 500 is poised to end higher for the third year in a row, having added more than 20% so far in 2021. But another rally in 2022 would be unusual, making for a four-year winning streak, which has happened only five times in nearly a century.

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