The Omicron variant of the coronavirus could be dangerous enough to disrupt the lives of virtually everyone on the planet.
At this point, no one really knows.
It is the time of year when forecasters fire up their algorithms and release streams of projections that will tell you precisely where the S&P 500 will close in 2022, where the 10-year U.S.
There are myriad forecasts with specific numbers — and if any of them turn out to be correct, it will be an accident.
But by Friday, even after the stock market took a pounding in response to news of the first confirmed Omicron case in the United States, the benchmark index stood above 4,500.
Rising inflation, labor shortages, supply chain bottlenecks and the Federal Reserve’s likely response to these issues were the biggest problems on the horizon for the markets in the United States.
Or the various issues may intertwine: A virulent Covid-19 surge could shock the economy sufficiently to reduce inflation, slow overall growth and delay the monetary tightening that is increasingly being signaled by the Federal Reserve and other central banks.
Traders are, understandably, confused.
Their answers were candid and, I think, quite reasonable.
I wouldn’t give that claim much credence, because until September, Bank of America predicted that the S&P 500 would end this year at 3,800.
equity and quantitative strategy at Bank of America, said that the bank’s computer model for the S&P 500 “is now spitting out negative returns for stocks for the next 10 years.” The last time that happened, she said, was in 1999-2000, shortly before the dot-com crash.
Long-term projections over a decade or longer have been shown to have greater accuracy than shorter-term ones, and I’d take that projection as a sober warning.