At the end of March, CNBC polled about 400 professional managers. Most consider politics FED the main threat to the stock and does not expect the growth of S&P 500 at the end of the year.
The main risk for the stock market
Almost half of the respondents, or 46%, considers, that a bullish trend in the stock market could interrupt the Fed's rate hike. Exactly a third of respondents named high inflation as the main risk.
16 March, the Fed raised interest rates on 25 basis points. The regulator plans to raise the rate by this amount at each of the six remaining meetings in 2022.
“Inflation remains high due to an imbalance in supply and demand, as well as energy prices. The consequences of the conflict in Ukraine are still uncertain, but in the near future these events, probably, increase inflation and reduce economic activity", — then the Fed explained its decision.
Later, central bank governor Jerome Powell said, that in the fight against inflation, the rate can be raised more aggressively. Many investors doubt, that the Fed will be able to stop the rise in prices and not cause a recession.
So, famed activist investor Carl Icahn recently said, what awaits a "hard landing". In his opinion, inflation and geopolitical tensions could lead to a recession: "The last few years I've been hedging everything. We have strong protection for long positions, and we try to be active. Inflation is a terrible thing, when it accelerates".
Jeffrey Gundlach, who is called the king of bonds, also criticized the Fed's fight against rising prices. According to the investor, Fed's long-term 2% inflation target is 'ridiculous'. He expects, that the inflation rate by the end of 2022 will be 7,5%, and before that reaches 10%. In February, US prices rose by 7,9% - maximum since 1982.
The main threat to the markets
|Rising prices in the US||33%|
|The situation in Ukraine||11%|
|Relations with China||6%|
|New wave of COVID-19||4%|
S&P 500 by the end of 2022
Most of the respondents, or 58%, considers, that the index S&P 500 by the end of 2022 will remain at the current level - about 4600 points. Approximately every third respondent expects growth to 5000 and above. Correction up to 4000 and below is only seen 6% investors.
Index S&P 500 at the end of the year
|At the current level||58%|
|Above 5000 points||36%|
|Below 4000 points||6%|
What stocks to look out for
To the question "What would you buy now?» 30% respondents answered: "High Dividend Stocks". Probably, they chose these shares due to the fact, that dividends allow you to receive a relatively stable income even during periods of market downturn.
Approximately one in four named bank shares, because they benefit from rising interest rates. Large and small technology stocks have chosen 21 And 13% respondents.
Which shares to buy
|With high dividends||30%|
|From the financial sector||26%|
|Large technology companies||21%|
|Small technology companies||13%|
|From the agricultural sector||4%|
|From the consumer goods sector||2%|
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