Looking ahead to 2022, two investment strategists at trillion-dollar firms are betting on U.S. small cap stocks and global banks. The remarks, which came at the Forbes/SHOOK conference in Chicago, were recapped in Forbes.
Eric Hundahl, head of portfolio strategy at BNY Mellon which manages $2.3 trillion, was bullish on U.S. small cap stocks, with expectations that the large spread between small and large cap will eventually correct. Hundahl also shared his belief that inflation is more persistent than Covid, but that he foresees inflation coming down as supply-chain bottlenecks improve, the labor market strengthens, and Covid retirements reach 3 million.
Meanwhile, Brian Nick, the chief investment strategist at Nuveen which oversees $1.2 trillion, believes global banks in the E.U. and U.S. and the best bet for next year and even beyond that, as he predicts risk relative to returns to be at their lowest since before 2010. He put forth a scenario where inflation could be tempered by supply-chain improvements and the anticipated interest hikes could be delayed. The recently announced faster tapering allows the Fed more breathing room on a rate hike decision, Nick said, adding that no rate hikes in 2022 is actually a more likely scenario than the three hikes others have foretold.