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2022 Market Outlook: The Song Remains the Same
Against a backdrop of still accommodative Fed and fiscal policies, slowly resolving supply chain and labor issues, and receding Covid infections in the U.S., 2022 is set up to be another great year for the stock market.
Although stock market leadership since the Covid-induced bear market has been dominated by the largest firms, especially large-cap tech, the breadth and depth of the recovery is expected to finally touch mid and small-cap firms. These smaller firms were the hardest hit after the government engineered shutdown of the economy in response to the pandemic. It, therefore, stands to reason that these companies have the most ground to make up financially.
We had been close to the point of market rotation from large to smaller companies at the end of Q1 2021, but the Delta variant threw a curveball and delayed the re-opening play.
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