In this episode of ETF Spotlight, I speak with Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors. We discuss the market outlook and best strategies for 2022.
Stocks have staged an impressive rally this week as investors now expect that the Omicron variant may be less harmful than earlier feared. This came after last week’s sell off when investors were concerned about the new variant and the Fed’s hawkish pivot.
State Street believes the bull market’s foundation remains strong heading into 2022. With rising vaccination rates and better therapeutics, we could get the pandemic under control. Further easy monetary policy and huge fiscal spending should continue to be a tailwind for stocks.
Global supply chain disruptions and persistent inflation continue to be a challenge. We could also see higher taxes and greater regulatory oversight on tech giants. How should investors position their portfolios for 2022?
Corporate earnings and economic growth rates are expected to come down from 2021 levels but remain quite impressive, and companies with higher quality balance sheets and reliable profitability are expected to outperform.
Take a look at ETFs like the SPDR MSCI USA StrategicFactors ETF (QUS) and the SPDR S&P Dividend ETF (SDY). Top holdings in these ETFs include Microsoft (MSFT) , Apple (AAPL) and Exxon Mobil (XOM) .
As inflation is likely to remain above long-term averages in 2022, inflation beneficiaries like REITs, small-caps and banks are worth a look. Investors could get diversified exposure to such stocks through the SPDR Dow Jones REIT ETF (RWR) , SPDR Portfolio S&P 600 Small Cap ETF (SPSM ) and SPDR S&P Bank ETF (KBE) .
Tune in to the podcast to learn more.