Q1 2022-Quarterly Investment Letter

Central banks will likely remain cautious about tightening too quickly and global GDP growth is expected to reach 4.4% in 2022. While the new Omicron variant is highly contagious and should delay the recovery process in certain sectors, it is unlikely to derail the global economy.

In the US the case for spending remains intact and GDP growth is expected to reach 3.9% in 2022. The two predominant factors investors should focus on are the unemployment rate and inflation. As long as long-dated inflation expectations remain well anchored, the US Fed is not in a hurry to hike rates.

Europe faces near-term growth pressure, due to high energy cost and countermeasures to control the new Omicron variant. For lagging European equities to outperform US equities and to close the valuation gap, growth in Europe would need to surprise on the upside.

Emerging markets suffer from negative headlines out of China due to defaults in the property sector and moderate stimulus measures by policy makers. Less stimulus, slower construction activity and a stronger US dollar should have negative implications for emerging markets in the short term.

Full Quarterly Investment Letter Q1-2022

Alpinum Quarterly Investment Letter
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