How will the economy look in 2022?

This week, JP Morgan and Bill Gates made calls that the pandemic may end in 2022.

JP Morgan issued its Outlook for 2022, stating that next year may lay the foundation for “a far more vibrant economic environment” and that COVID-19 will transition from a pandemic to an endemic disease. Household net worth is at all time highs in many developed countries, savings are elevated, consumption will be strong for years, and there’s a strong labor market and the capacity to take on more debt.

JP Morgan also said that a vibrant economy would equal strong demand for crude oil and they say that prices could soar to $125 a barrel in 2022 and $150 in 2023 due to OPECs limited capacity to increase production.

Bill Gates made comments on a blog post about the end of the pandemic next year, "I am hopeful, though, that the end is finally in sight. It might be foolish to make another prediction, but I think the acute phase of the pandemic will come to a close some time in 2022.”

Omicron is neutralized by Pfezier and BioNTech

On Wednesday, Pfizer (PFE) and BioNTech (BNTX) announced that their vaccine will neutralize the Omicron variant with three doses. However, the companies stated that two does result in fewer antibodies and could still be effective against severe disease. In a nod to boosters, the companies stated three doses were able to neutralize the Omicron variant in a lab test.

Dr. Walter Orenstein, a professor at Vanderbilt and former director of the U.S. CDC's immunization programs stated, “We may not have to change the vaccine. We may be able to get by with the current vaccine, at least for repression of severe disease.”

There is no significant data on how Moderna’s (MRNA) and Johnson and Johnson’s (JNJ) vaccines hold up against the new variant, but data is expected in the next few weeks. On Tuesday, GlaxoSmithKline kept the good news flowing on the Covid front stating that Sotrovimab, their antibody treatment for Covid-19, showed it was an effective treatment for the Omnicron variant.

Crypto adoption continues to grow

Crypto firm Grayscale conducted a survey on 1,000 households this past August that had at least $10,000 in investable assets and household income of at least $50,000 a year. Here are some of the major highlights of their survey:

The slice of Americans who own Bitcoin has increased to 26% in 2021 from 23% in 2020
More than half (59%) of this cohort chooses to invest via a cryptocurrency trading app like eToro or Coinbase, representing a paradigm shift from last year when more than three-quarters of investors (77%) preferred a Bitcoin exchange
More than half (55%) of current investors in Bitcoin began investing over the last 12 months
“Hodlers” 66% of investors who purchased Bitcoin within the past 12 months still own it today
Of the investors who have sold, 91% have sold at least some Bitcoin at a profit
More than three-quarters (77%) of U.S. investors said they would be more likely to invest in Bitcoin if an ETF existed (currently only futures based Bitcoin ETFs trade on US exchanges)
Most investors who own Bitcoin (87%) also have exposure to one or more altcoins.

In further signs of adoption, Visa (V) announced that it had launched a global crypto advisory service for its banking clients and merchants. Visa published results from a survey that showed nearly 40% of crypto owners would be likely to switch primary bank accounts to one that offers crypto products. The same report also stated that awareness of crypto among financial decision makers is at 94% worldwide.

Nasdaq 100 surges 3% on trading on Monday

On Monday, the Nasdaq 100 Index surged over three percent and the S&P 500 closed up over two percent. Matt Maley, chief market strategist for Miller Taba + Co stated, “This morning’s [Monday’s] rally is being fueled by the belief that the omicron variant will not create many problems for the global economy and that China has pledged measures to support economic growth. If those were the reasons why the market has seen such a big increase in volatility since Thanksgiving, we’d agree the worst is likely over and that investors should jump back into the market with both feet.”

Intel (INTC) jumps on Mobileye listing announcement

On Tuesday, shares of Intel had their best day since January of 2021, as shares were up almost eight percent on news that it will file for an IPO to issue new shares that would trade on a US stock exchange. However, Intel would still remain the majority owner of Mobileye, which was purchased by Intel in 2017 for $15 billion. According to research from Guidehouse Insights, Mobileye has 80% of the global market for driver-assistance vision systems. Analysts at Morgan Stanley see this news as “significantly positive” noting that the company will extract value from its business, remain the majority owner and free up additional capital. Intel shares have underperformed the market this year.

About the Writer

My name is Allen Spence and I have been working in the retail brokerage industry for over 16 years. I joined Alpaca in March of 2021 and am now the Manager of Alpaca Trading Services. Before joining Alpaca I have worked in a retail branch environment, call center for active traders, and spent over seven and a half years as the team lead on an equity trading desk for a large regional broker dealer. I’m excited to be at Alpaca helping bring the markets to investors worldwide. I live in Florida and enjoy traveling and spending time with my family.

About Alpaca

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