As a thought experiment, the Bespoke team got together this week and brainstormed over what could be some of the most contrarian themes to emerge in 2022. Rather than going along with prevailing thought or consensus sentiment as we enter a new year, the made-up headlines below are a fun and lighthearted way of getting readers to think outside of the box. This is simply an attempt to provide a contrarian perspective, and these headlines are not – we repeat – are not – predictions or recommendations, but rather a way to hammer home the line from the famous 18th-century proverb that “the best-laid plans of mice and men often go awry.”
COVID pandemic becomes the COVID nuisance as CDC eyes new bug
After more than two full years in a pandemic environment, the SARS-Cov-2 virus is now viewed as nothing more than a common cold. The combination of vaccination, previous infections, and new treatments that inhibit the virus mean the United States has returned to pre-pandemic norms. Scientists at the CDC are now monitoring a new bird flu that is spreading across South America.
Americans celebrate sub-$3 gas just in time for July 4th weekend
Surging US shale patch drilling and an aggressive output slate from OPEC have sent crude prices tumbling into the $40s. With oil collapsing, American drivers are getting relief and inflation has slowed.
Fed fears unrealized as rates unchanged in 2022
Weaker than forecasted first half inflation led to patience in the middle of the year, while the slowdown in global growth and US employment kept feet off the breaks at the FOMC in the second half. With US growth slowing dramatically into 2023, it’s not clear when the central bank will tighten policy.
Little fish eat big sharks as investors ditch mega-caps in favor of small caps
Despite ongoing growth, multiple contraction for large tech names has left many to lag the explosive re-rating of small-cap stocks that are able to grow with the rest of the US economy. Small-cap strength recalls the early-2000s unwind of the last great tech bubble.
China back on the map as ADRs roar in spite of regulation
While Chinese authorities have made it harder for companies to list abroad amidst concerns over data security and social control, those that remain on US exchanges have had a stellar year. A return to growth in 2022 along with reduced concerns about outright bans on US listings has made Chinese ADRs one of the biggest winners this year.
Euro soars as post-COVID boom pushes ECB towards rate hikes
A newly-hawkish ECB concerned with surging economic growth and plunging unemployment has driven up the value of the euro relative to the dollar this year. Falling oil prices have also helped the energy import picture on the continent.
Move over sewer socialism, there’s a new left-wing development model in Latin America
The ongoing renewables build-out has sustained copper and lithium prices which are fueling a strong peso and rapid economic growth. After the election of Gabriel Boric late in 2021, Chilean assets were supposed to pay the price of a left-wing policy slate. But politics has proven indifferent to larger trends at work in the global economy.
Brazilian assets soar in spite of right-wing collapse
The re-election of former President Luiz Inácio Lula da Silva and defeat of right-wing incumbent Jair Bolsonaro has been a boon for Brazilian stocks as leftward tilt proved to be largely priced in ahead of the election.
Outflows doomed ARK Invest to a weak 2021, but strong 2022 performance has lured investors back
Investors soured on ARK Invest and its hyper-growth focus as billions flowed out of the ARK family of ETFs. But by the end of Q1 2022, those outflows reversed, and stock-picking performance has driven a dramatic recovery.
Chips collapse as normalcy lowers multiples amidst a pause in the global semis cycle
After semiconductor names could do no wrong in the wake of the COVID crisis, prices soared. Supply and demand have since normalized and inventories have surged, leading to the selloff that has played out this year.
Newer EV manufacturers pummeled by legacy brands as Ford and GM capture more market share
Tesla’s established production and the constant drumbeat of new electric vehicle releases from major Detroit OEMs has crushed the valuation and attention placed on newer entrants. Factory lines are humming and dealer lots are jammed with buyers not content to wait for the slow ramp-up at companies like Lucid, Rivian, or Lordstown.
Cable box is the comeback kid; streamers lose steam to traditional TV
Even with streaming experiencing rapid growth overall, the proliferation of services and options has many consumers returning to old-fashioned cable and the reliability it brings. Household formation has also attracted customers for broadband internet, fueling a surprise in the number of internet customers cable companies attract.
Buffett takes profits in Apple after valuation appears ‘lofty’ sending the stock lower
With iPhone growth slowing, Apple has re-rated from its 35x multiple to much more reasonable levels. The billions wiped off its market cap following the revelation that Buffett’s Berkshire Hathaway sold its entire position have compounded as the company struggles to answer metaverse innovation from competitors.
Meta stock soars after Zuck goes into hiding
In a marketing ploy seemingly lifted from young adult novel “Ready Player One,” Meta has successfully ginned up interest in its Metaverse platform with a dynamic competition for new users: a $10 million prize for whoever tracks down Mark Zuckerberg’s avatar first. Unlike its mega-cap tech peers, Meta’s stock has reached new heights in 2022 as its market cap approaches $2 trillion.
Democrats Ride Blue Wave to Bolster Majorities in House and Senate
After Covid burned out early in 2022 and oil prices dropped below $60 per barrel following a Q1 supply increase from OPEC+, increasingly confident consumers rewarded President Pelosi with firmer majorities in the House and Senate. Speaker Cortez and Majority Leader Sanders have pledged to hold a vote on Build Back Better before Thanksgiving.
Same old retailer, brand new optimism: how Bentonville’s finest is booming
Most of Wal-Mart’s business is still old-fashioned big-box retail, where results have been mixed this year. But tech-oriented partnerships designed to make the company more competitive with delivery and e-commerce apps are fueling growth and enthusiasm for one of the world’s largest companies.
All hail ride-hailing: UBER and LYFT soar as labor markets soften and riders return
With the fading burden of COVID, Americans are headed out for a night on the town, and they’re using ride-sharing to do it. The softening of labor markets with slower growth than expected is also making driver acquisition easier and improving take rates for the platform companies.
Forget Beeple and Bored Apes, collectors want Holden Caulfield and Gatsby
As interest has ebbed from NFTs, sneakers, and baseball cards, collectors are now flocking to rare first edition books with “fine” dust jackets. In the second half of 2022, first editions of 20th-century classics like Catcher in the Rye, To Kill a Mockingbird, and The Great Gatsby have shattered sales records.
Golden year for Gold
Still-low real rates have meant precious metals have turned in a big year. High inflation in 2021 didn’t help gold, but the reversal of planned rate hikes sent TIPS yields lower and boosted gold. Surging retail interest hasn’t hurt either.
Yen soars versus dollar amidst a booming Japanese export economy
As the dollar has dragged this year, the yen has gained, while Japanese exports have boomed. Normalizing natural gas prices and falling crude import bills have also served to flatter the Japanese balance of payments and added to the upward pressure on the yen that comes from a lower path of Fed hikes and flight in global risk appetite.
New Yorkers place bets on historic Jets/Giants Super Bowl
With both the New York Jets and New York Giants sitting atop their respective conferences as the 2022 season nears its end, a frenzy for 2023 Super Bowl tickets has emerged in the Big Apple.
(Okay, so maybe we’ve gone a little overboard with the Jets/Giants Super Bowl headline! That’s the biggest long shot of them all.)