Record inflation, interest rate hikes, war in Ukraine, energy crisis (oil, gas, etc.)… the year 2022 will go down in the annals of stock investors because of its exceptional nature. This year has actually been one of the worst, for an investor invested in both stocks and bonds, in more than a century! “Over the last hundred years, only three (1931, 1969 and now 2022) have recorded negative results in both the bond and stock markets,” notes Lombard Odier in this regard.
While the persistence and impact of inflationary pressures have been “more severe than the Swiss bank expected”, interest rates are “likely to rise to 5% by 2023 in the US and the Federal Reserve (Fed) is tipping the country’s economy into recession with weakening housing and labor markets to push prices down,” she said, which should bring inflation back to the United States. “around 3%, or even slightly less, within a year”.
CAC 40: The Paris stock exchange surpasses London’s and becomes No. 1 in Europe
While the US economy “seems to be on the right track, Europe’s trajectory is increasingly uncertain,” warns Lombard Odier, however. The scale of the war in Ukraine “was difficult to predict”, according to the bank, and the energy crisis, which subsequently overwhelmed Europe, proved “painful for the economy and consumers”. On the positive side, in the long term it also offers hope for “a much faster transition to cleaner energy as European governments make the necessary investments to find alternatives to Russian hydrocarbons, such as nuclear and large-scale renewables”.
China’s late reopening, entangled in periodic shutdowns, “has dampened both the global and domestic economy this year, while accelerating inflation abroad due to diminishing shortages of goods coming out of its factories and supplies”, argues Lombard Odier. China is now moving towards reopening, although the path will inevitably be fraught with pitfalls, such as the recent explosion in the number of Covid cases, which is raising fears of further supply chain disruptions.
The stock market: in which sectors to invest in times of crisis?
Faced with an uncertain equity market environment, Momentum, Capital’s premium investment letter and equity newsletter, has again enabled its readers to do well this week. Momentum analyzed the outlook (up or down) for the CAC 40 and many stocks (Engie, Accor, Hermès, Apple, Tesla, Google, Amazon, Eurofins and Xilam, among others). On the satisfaction side, recent weeks’ plunge in the big tech stocks on Wall Street (Alphabet, Amazon, etc.) was fully anticipated by our team. And our selection of French stocks (Biomérieux, Derichebourg, Orange, Rubis, etc.) has performed well overall.
Here are the most profitable investments over 5, 15, 30 and 40 years
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