On the Markets

 

WisdomTree continues to listen closely to the advisor community and create new resources for advisors as well as all investors to provide the guidance they need to maneuver the daily market changes.

Keep an eye on the situation as it unfolds with our latest news.

2022 Economic and Market Outlook

2021 was a year of notable economic growth after unexpected change caused by the COVID-19 pandemic. In our Economic and Market Outlook for 2022, we lay out some of the “known unknowns” we believe could significantly affect the investing landscape and we dive into our thoughts covering:

  • Equities
  • Real assets and alternatives
  • Fixed income

 

Read the Market Outlook

Read Our Actionable Ideas

 
DPD View

WisdomTree Office Hours

Advisors can now join our thought leaders as they discuss current markets and actionable investment solutions. This small-setting format allows for advisors to ask questions and enter into a dialogue, leveraging our thought leadership to navigate the market uncertainty. The schedule is updated weekly.


The What’s Now Behind What’s Next:
Minds on the Markets

Week in and week out, our investment strategists Jeff Weniger and Kevin Flanagan, who live and breathe the market, translate the latest headlines, dissect the minutia of meeting minutes and break down the jargon to help inform your evolving investment decisions.

 

Read the Report

Commentaries from Our Thought Leaders

For more daily insights from our thought leaders, from macro commentary to helpful tips on trading ETFs in times of high volatility, visit our blog.

Actionable Ideas for 2022

We believe the following themes will be prevalent and there are actionable ideas to capitalize on them should you agree with our position.

U.S. Exposure

2022 will not be given the same economic benefit of the doubt as 2021. Stimulus checks are becoming a memory, while many Americans will come to realize their tax refund will be smaller this year, owing to the front-loading of the child tax credit. Meantime, inflation is not letting up – and we suspect the Fed will be fighting those demons all year long. Inside the market, low quality names have been punished since the first week of November, 2021. Success in 2022 may entail continuing to stay away from them. During the more acute periods of pain in Q4 2021, companies that announced buyback programs tended to hold up better. We expect that to continue, as there is a lot of froth in the bowels of this stock market.

Actionable Investing Ideas:

Developed Markets Exposure

We are not quite sure why the Street refuses to entertain the possibility of a scrambling Federal Reserve in 2022. To the extent that there is a very real risk that we end the year with the first digit on overnight money being a “1,” recent US dollar strength has more room to run. Both the euro and yen continue to look vulnerable, so we would err on the side of WisdomTree’s currency-hedged mandates instead of the ones that are designed without the hedge. Firms with high Return on Equity (ROE) may be best able to withstand any forthcoming margin pressure, should we be correct that inflation will prove sticky in 2022.

Actionable Investing Ideas:

Emerging Markets Exposure

We enter 2022 with the world on edge amid the threat of two rising geopolitical risks: a possible Russian invasion of Ukraine and China fixating on a military engagement with Taiwan. The latter brings into focus a potential cloud over the asset class if the Biden administration chooses to ratchet up pressure on Beijing, especially with midterm election season ready to heat up. Keep an eye on both major US political parties for a gauge of how a China containment strategy plays in voters’ hearts. Mandates that heavily avoid the banking systems of both Russia and China appear opportune if the “S” word – sanctions – makes the rounds.

Actionable Investing Ideas:

Fixed Income Exposure

The outlook for interest rates has undergone a visible transformation, especially in terms of Fed policy. Unlike the rise in Treasury yields in 2021, the expected increase this year will have the Fed as the primary catalyst. While the money and bond markets debate how ‘hawkish’ the U.S. central bank may, or may not, be, it has become increasingly apparent monetary policy will become far less accommodative going forward, and is moving on to the next stage of the ‘exit strategy’, i.e., rate hikes. The timing and magnitude of potential Fed rate increases will go a long way in determining if the policymakers are willing to actually take on a more restrictive path. Early on, Powell & Co. have provided guidance for a deliberate approach, but the decision-making progress will more than likely be a ‘data dependent’ one that could create increased volatility. Against this backdrop, ‘fixed’ coupon, even in the short duration bucket, and inflation-linked bonds would be vulnerable for potential negative returns. Treasury floating rate and zero duration strategies should be an active consideration for fixed income portfolios.

Actionable Investing Ideas:

Basis Points Podcast with Kevin Flanagan