2022 In Review
As we wrap up 2022 with our final Thought Leadership letter of the year – Thank You to our valued clients for your trust, partnership, and support and thank you to our wonderful employees for your passion, ingenuity, and hard work. We look forward to continued collaboration in the new year!
Thought Leadership Wrapped
In 2022, we published our milestone Inside The Buy-Side® 50th Earnings Primer® and 30th Industrial Sentiment Survey® editions; four “Commencing the Quarter” and “Closing the Quarter” issues; 15 Earnings Snaps; and covered key topics, including:
- Downturn Playbooks (June 17, 2022)
- Activating your CSR Report (June 10, 2022)
- Pre-announcements (September 9, 2022)
- Elevating Investor Appreciation for Bench Strength (September 16, 2022)
- Climate Reporting (December 2, 2022)
- Health of the Consumer (December 9, 2022)
Each week, we strive to provide you with timely research and actionable insights. If you’d like access to any of the above reports, please do not hesitate to Contact Us.
2022 In Review
Economic Highlights
Policy makers, companies, and investors alike grappled with a cacophony of economic conditions in 2022, spurred by breakneck growth and the fallout from a geopolitical shock that disrupted global commodity markets.
The following charts showcase a selection of key factors and indicators that contributed to the distinct economic environment of 2022.
When the chips fell, tech companies found their way back to Earth after a meteoric rise in 2021. Large industrials fared well on a relative basis, but all indices across the globe slumped, particularly in Asia.
Core U.S. inflation rose to a 40-year high in June as too many people chased too few goods, bolstered by stimulus. That said, supply chain mentions in corporate earnings press releases and calls appear to have peaked in Q2, but remain elevated on an historic basis.
Poor global macro conditions spurred by the invasion in Ukraine contributed to a strengthening dollar. As such, Americans took advantage of favorable exchange rates, exacerbating the already growing U.S. trade deficit, particularly with China.
The housing market peaked, and home builders struggled to keep pace amidst tough labor and commodity conditions. Housing starts have since fallen as a result of rising rates and dwindling affordability, and many prospective sellers are opting to keep their current low mortgage rates.
Energy prices skyrocketed, particularly in Europe, following the EU’s embargo on Russian crude. As a result of the efforts to refill gas reserves in the region, wholesale gas prices spiked in the summer. That said, storage levels currently rest at 85% capacity1 across the EU, easing the potential of running out of gas this winter
After four quarters of increasingly bullish sentiment, our survey registers a reversal. In Q3’22, investor sentiment is primarily bearish, commensurate with the 2014 to 2016 mini recession and the onset of COVID-19. Two quarters after we first identified investor angst, management tone follows suit, albeit at lower levels.
In lockstep with investor sentiment, mentions of a recession proliferate on earnings calls.
In the end, the Institute for Economics and Peace, a non-partisan research organization which polls citizens of the world across a variety of metrics, clocked in their ‘least peaceful’ year in 15 years across the globe. We can, and must, do better.
Fed Commentary Recap
During this period of volatility, all eyes shifted (and remain) on the U.S. Fed. Below, we’ve included a quick recap of the messaging out of the Central Bank in 2022.
While the Fed raising rates 50 bps on Wednesday was largely expected, officials sent a chill through the markets when they indicated they expect interest rates to reach around 5.1% by the end of next year, compared to previous projections in September of around 4.6%. Officials also stated that they anticipate an increase in unemployment and moderate economic growth in 2023, with some outright predicting a recession.