It’s that time of the year again.
Kids are making lists for Santa…
Moms are rushing out to the malls for holiday deals…
And dads are climbing into the attic, searching for the Christmas lights.
Here at Banyan Hill, our team is putting together a prediction series for 2022.
I’ll jump into my 2022 predictions soon. But first, I want to look back at some predictions I made last year to see what I got right and wrong.
- I thought the economy would come roaring back as vaccines tamped down COVID infections.
The economy held up this year, growing around 5%. But the delta variant kept growth from really surging in the second half.
- I also thought rates would stay relatively low — to the benefit of stocks.
My forecast for the S&P 500 Index by the end of 2021 was 4,500. We’re at 4,600 currently.
I said Jerome Powell would remain head of the Federal Reserve and “keep the punch bowl out.” So far, so good.
- I predicted a record year for real estate. In October, home prices were up 13.2% compared to last year.
Cities in states with low taxes, such as Austin and Boise, have witnessed 30%-plus surges in real estate.
- I was right about crypto, saying bitcoin was going to $50,000.
However, I thought the bigger story would be Ethereum, which is up 10X this year.
Solana did even better for Next Wave Crypto Fortunes subscribers. It’s up 100X!
- I thought there would be a mania in stocks that benefit from the driverless future. So far, only Tesla is experiencing that run-up.
I also incorrectly thought that oil and gas companies would have a rough year.
I didn’t expect a natural gas shortage and OPEC cuts that would lead to a supply shock in fossil fuels.
- I thought solar would have a big year and predicted that the Invesco Solar ETF (NYSE: TAN) would double.
It rallied 63% shortly after we published the article but has since pulled back to a moderate gain in the past year.
- Lastly, I surmised that an artificially intelligent robot might write next year’s article. I’m happy to report I’m still here.
And with that, let’s go over what might arrive in 2022…
2022’s Biggest Growth Themes
- I think the economy will continue chugging along, albeit at a slower pace. This will be good for bonds, and interest rates will stay below 2.5%.
The main thing that can change this view is inflation. This is investors’ biggest fear headed into the new year.
The Consumer Price Index climbed 0.9% from September to October. However, when you take out historically volatile food and energy prices, prices rose only 0.6%.
Most of the current rise in inflation is in new vehicles and housing prices. Both will see supply meet demand in 2022.
That’s why I think the Fed will hold inflation in check and continue its dovish stance.
If that happens, the S&P 500 should rally 15% in 2022, once again led by tech.
However, I think there will be another inflation scare along the way. It creates a buyable pullback.
- The two biggest growth themes will be in places that most people will never physically reach: space and the metaverse.
SpaceX will file to go public, and it will be the biggest initial public offering (IPO) of the year.
At a value of around $150 billion, it’s the second-largest IPO in history. The biggest was Alibaba’s IPO in 2014.
The investment community has started to see the bigger picture for space: Satellite internet can connect to anywhere on the planet.
That enables autonomous vehicle communication. It also brings all our Internet of Things devices to life.
This leads to a rally in space-related stocks. The Ark Space Exploration & Innovation ETF (NYSE: ARKX) soars 50% next year.
The metaverse will continue to be a strong theme for the beginning of 2022.
“Land grabs” on platforms like The Sandbox and Decentraland will turn into a digital gold rush. Corporations begin scooping up properties.
They begin to see what Facebook (ahem, Meta) already sees: that the metaverse will be the next big advertising platform.
- The SEC will issue regulatory guidance on decentralized finance (DeFi) platforms.
The news will initially be negative for DeFi, and DeFi tokens will sell off sharply.
Then they’ll rally to new all-time highs as a major traditional bank announces a partnership with a DeFi project.
If you can’t beat ‘em, join ‘em.
- A major automaker will introduce a solid-state lithium battery.
Investors realize that the internal combustion engine is going extinct sooner than later.
- Crypto will continue to outperform all major asset classes, led by Ethereum.
The world’s second-largest crypto will have an upgrade this year to proof-of-stake.
That will make it one step closer to the world’s global reserve currency by the middle of this decade.
Buckle up. It’s bound to be an exciting year!
Editor, Strategic Fortunes
From open till noon Eastern time.
Adagio Therapeutics Inc. (Nasdaq: ADGI) is a clinical-stage biopharmaceutical company that focuses on the development of antibody-based solutions for infectious diseases. It is up 68% this morning after the company reported that its COVID-19 treatment candidate seems to maintain its efficacy against the new omicron variant.
Matterport Inc. (Nasdaq: MTTR) operates a platform that transforms real-life spaces into immersive digital models. It’s up 17% today on positive press about the company’s potential as a leader in the new metaverse space.
Vir Biotechnology, Inc. (Nasdaq: VIR) is a clinical-stage immunology company that develops therapeutics to treat and prevent serious infectious diseases. It’s up 14% today because it is developing a COVID-19 treatment and could potentially benefit from the cases resulting from the new omicron variant.
Lithium Americas Corp. (NYSE: LAC) is a Canadian lithium miner that is up 13% as part of a general surge in Canadian energy stocks today that is being driven by a rise in crude oil prices.
Moderna Inc. (Nasdaq: MRNA), the vaccine maker, is up 10% this morning. The stock rose after the company said that a reformulated vaccine to tackle the omicron variant could be ready in early 2022.
Valneva SE (Nasdaq: VALN) is another vaccine maker that is up 10% on the news of the new omicron variant. The stock was further propelled today by the announcement that it is partnering with IDT Biologika to begin manufacturing its vaccine in Germany.
Fisker Inc. (NYSE: FSR) is an electric vehicle maker that is up 10% this morning. The stock is responding the events over the weekend when the company unveiled its new electric vehicle, the Fisker Ocean, at the Los Angeles Auto Show.
Cosco Shipping Holdings Co. Ltd. (OTC: CICOY) is a Chinese shipping and logistics company. It is up 9% today on a rebound after being affected by a broad sell-off in the Asian markets on Friday on the news of the new COVID-19 variant.
Doximity Inc. (NYSE: DOCS) operates a cloud-based digital platform for medical professionals to collaborate and coordinate patient care. It is up 9% this morning but has no significant news to report.
Luckin Coffee Inc. (OTC: LKNCY), the Chinese coffee company, is up 9% this morning. It is another Chinese stock that was affected by the sell-off on Friday and is recovering today.