Bean Capital Limited - Q1 US Market Review

As we entered 2022 just a few months ago, there was an air of optimism for the financial markets with a return to normalcy promised.

Here is a brief snapshot of the Bean Capital US Markets review for Q1, 2022:

Economic Growth

The economy is on solid footing for now, supported by a strong labor market and consumer. The labor market is in good shape as evidenced by the record number of job openings while the unemployment rate is at 3.8%. Consumer spending and balance sheet are both solid due to stimulus payments, job gains and wage growth.

Although the economy looks strong now, there is a definite deceleration in growth due to inflation, supply chain issues and fading stimulus.

Real GDP Estimates:
2022 - +3.4%
2023 - +2.3%

Monetary Policy
The FED has now firmly admitted that inflation is a problem and that they will tighten monetary policy in an attempt to bring it under control. The FED has stated their interest rate hike cycle and they will likely start to shrink their balance sheet within the next few months.

Interest Rates - The FOMC's most recent Summary of Economic Projections (SEP) showed that the median participant now expects 7 total rate hikes in 2022 and 4 more in 2023.

Quantitative Easing Programs - The FED is tapering the pace of their 'quanti'. The FED concluded their last quantitative easing program and they will soon publish their plan to begin to shrink their balance sheet (the announcement could occur as early as the May meeting).

The FED chair Powell's assessment, that the FOMC can raise rates eleven times by the end of 2023 without causing a recession or material economic slowdown, might be optimistic. However, while we believe it is prudent to start thinking about a recession within the next several quarters, we will point out that a lot can change between now and then.

Corporate Earnings
S&P 500 earnings continue to be impressive:
2021: Estimate: $205.50 (+48%)
2022: Estimate: $227 (+9%)
2023: Estimate: $250 (+10%)

Over long time periods, earnings drive stock prices.

Valuation
Most valuation measures are stretched by historical measures. The P/E ratio is calculated as the current price divided by the earnings-per-share.
- Forward P/E (next 12 months): 19.4x
- 25-Year Average: 16.8x

Valuation analysis is subjective and typically based on interest rates, earnings growth estimates, and historical or relative values.

To read the full report and gain access to our latest views and opinions, visit https://www.beancapitallimited.com and sign up to our newsletter service.

Bean Capital Limited
Horsford Business Complex, Farms Estate, St. Kitts and Nevis
PR contact - Jason Hemsworth
Email - pr@beancapitallimited.com
Tel - +1 (869) - 555 - 2500

Bean Capital is a privately owned investment boutique, providing top-tier, professional and transparent financial advice to investors globally. At Bean Capital, we understand that finding the right advisor can be an arduous task.

Balancing advice and guidance with your needs and wants is a fine line which can be difficult to follow given vast array of financial products investors have at their disposal.

Bean Capital is able to recommend the very best investment vehicles available from the world's leading corporate banks, fund managers and investment houses.

Unlike many of our peers, we do not market our own in-house products above other available products just to suit our objectives. We tailor-make the best-in-market products to suit your situation.

This approach enables us to provide only the finest instruments for our clients' needs, and to tailor investment solutions to the individual financial goals of each client.

At Bean Capital, we are a group of expatriates, so we understand the nuances of the needs and wants of global investors and our financial and tax advisors are qualified to consult across multiple jurisdictions. We are dedicated to supporting our clients, by acknowledging their goals and circumstances we are pivotal in ensuring a smooth and trouble-free transition from domestic to international wealth management.

This release was published on openPR.