Business & Investment

Three Reasons for a Stock Market Boom in 2022

I know the title of this article sounds strange now. After all, the stock market may be shy about a complete meltdown so far. As I write FTSE 100 The index is over 7,000 levels depending on the thread. As the news about Omicron variants gets worse, it can now fall down at any time. But I still have hope for three reasons.

# 1.The effects of Omicron can be controlled quickly

First, the extent to which the variant is affected is not yet known. Is it as bad as the first wave of coronavirus? Or are we protected by the vaccine? It may not be the answer yet, but so far it seems that it is much better prepared to deal with it than it was when the pandemic began.

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There are new restrictions and booster immune vaccines Administer immediately.. In other words, we expect to be much more likely to be able to control this variant than it was in early 2020. And I think there is a possibility that the recovery will be quick from here and the stock market boom will return. In 2022.

# 2.Bounces can lead to a stock market boom

Second, there is very recent experience with what happens when the coronavirus is put under control. Last year we saw a big turnaround in stock market fortunes. The FTSE 100 Index has risen by more than 17% from November last year to the present. Before the news of the variant came, the index was almost back to pre-pandemic levels.In fact, I think it May rise to 7,500 By the end of the year.

And if the fear of malformation is quickly alleviated, I think there is still hope. From November to yesterday’s closing price, the index has risen 1.6% from the previous month. This is the fastest growth month-on-month in the last six months. Bounce can be stronger when the variant is controlled. In fact, 2021 is one of the booming markets and I believe it could spread to next year.

# 3.Limited economic effect

Third, the actual economic impact of the variant is probably very small so far. For now, only travel would have been hit by the latest developments. From non-essential retailers to banks, all other segments that can be affected by the coronavirus remain untouched. Also, if another blockade occurs, I think the company is more prepared to operate online than it was at the time of the first blockade. Therefore, we expect more positive news than negative news from the FTSE 100 companies in the coming days and months, which could boost the market in 2022 as well.

My takeaway

Of course, the latest strains of virus have turned out to be difficult to control, and there is a good chance that recovery will recede. But for now, I think it’s too early to believe it. From my point of view, it is still likely that this year will end and start in 2022. With that in mind, I’m buying stocks that have been on my wishlist for a long time but are too expensive.

Manika Premusin There are no positions in any of the listed shares. The Motley Fool UK does not have a position in any of the shares mentioned. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by exploring different insights, A better investor than us.

Three Reasons for a Stock Market Boom in 2022 Three Reasons for a Stock Market Boom in 2022

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