Four Investing Trends to Be Aware of in 2022

The optimism that ushered in the new year in 2021 and expectations of a booming economic recovery have been somewhat dampened by the evolving Covid-19 pandemic. One year later, the Omicron variant is spreading unabated, and prospects of new lockdowns and restrictions are ever-present.  

Nevertheless, the US economy entered 2022 on a high, with consumer spending on the rise and lucrative returns on the stock market. There is still plenty of money to be made in the coming year, but there are a few investing trends to watch out for.

1. Supply Chain Solutions

Since the beginning of the pandemic, there have been issues with the supply chain. US ports are filled with shipping containers waiting to be refilled with merchandise or unloaded. This has considerable implications for all markets, and a complete recovery won’t be possible until all store shelves are full.

2. The Job Market Is Still Uncertain

Based on statistics published by the US Bureau of Labor, the total nonfarm payroll employment rose by 210,000 in November, and the unemployment rate dropped by 0.4% to 4.2%. As much as these numbers are encouraging, they don’t paint the full picture. The US has not yet recuperated the 22 million jobs that were lost during the pandemic-fuelled recession, and this is an issue that needs to be taken care of before the labor market can get back to normal.

3. Fed Interest Rate Hikes

If the Federal Reserve manages to keep interest rates low, investors won’t have to worry about managing their stocks. However, by most accounts, fed interest rate hikes are likely to happen in 2022. Based on the CME FedWatch Tool forecast, there will be at least two rate increases, and that’s something investors should keep in mind.

4. Computer Chip Shortage

Another problem for stocks is the computer chip shortage. This isn’t just affecting the tech market, as almost all durable consumer goods have computer chips. Shortages caused by the pandemic were compounded by a fire at a Chinese plant in late 2020. This led to shortages of DAC and ADC chips used by manufacturers all around the globe for audio equipment.