What the Experts See Coming in 2022
Even at the best of times, it’s human nature to want to decode the future.
During times of uncertainty though, we’re even more eager to predict what’s to come. To satisfy this demand, thousands of prognosticators share their views publicly as one year closes and another begins. In hindsight, we see varying levels of success at predicting the future.
In truth, experts are merely guessing at what will happen over the coming year. In 2020, almost nobody had a pandemic on their bingo card. In 2021, NFTs completely flew under the radar of experts, and nobody saw a container ship get lodged in the Suez Canal in their crystal ball.
So, why should we pay any attention to predictions at all? Are they, as Barry Ritholtz says, “wrong, random, or worse”?
For one, these guesses are backed by expertise and experience, so the accompanying analysis is informative. Perhaps more importantly though, influential people and companies are in a position to shape the future with their predictions. In some cases, sentiment and actions can turn a prediction into a self-fulfilling prophecy.
Regardless, whether for research or pure entertainment purposes, we’ve sifted through hundreds of reports, interviews, and articles to see which predictions are generally the most agreed upon. Where do experts see the ball moving over the next year? Our bingo card sums up the top 25, and below, we’ll dig into some of the trends that could shape 2022.
Vibe Check: What’s the General Outlook for 2022?
Based on the hundreds of predictions we analyzed, the general mood can be described as cautiously optimistic.
For starters, the global economy will likely keep growing, but not at the rate it did in 2021. We aggregated 40+ predictions from reputable sources such as the IMF and Goldman Sachs to determine median GDP estimates for the world, and select regions:
|Country / Region||Median GDP Estimate|
Next, there’s broad agreement that monetary policy will begin to tighten over the next 12 months. Here’s what major central banks are predicted to do:
Multiple experts described an era of lower equity returns and increased volatility. Many of the issues that plagued 2021 have carried over into 2022.
Technological disruption continues to reshape industries, and climate change and cybersecurity issues will be top of mind this year. Geopolitical tensions are heating up as well, now that countries have acclimated to the immediate challenges posed by the pandemic.
In short, nobody expects 2022 to be uneventful.
Trends that Will Shape 2022
Some of the predictions above are straightforward. GDP targets and explicit binary statements don’t require too much explanation.
Below are some of the predictions experts agreed on that are worth digging into in more detail:
1. Geopolitical Tensions Will Flare Up
There are a number of potential hotspots around the world, but here are a few that experts are watching in 2022.
Iran: Tensions ratcheted up between the U.S. and Iran after an attack on a U.S. military base in southern Syria in the fall of 2021. Further, the tension between Iran and Israel has the potential to escalate further in 2022, drawing in other nations in the region into a conflict.
Ukraine: This is a continuation of tensions that flared up after Russian annexation of Crimea in 2014. Europe’s dependence on Russian gas and Ukraine’s position as a key gas transit hub makes this a situation experts are watching very closely.
Taiwan: The risk that China will make a move on Taiwan has elevated in the minds of experts, though actions may contain “more bark than bite”.
2. China’s Rocky Start to 2022
At the dawn of 2021, many of the predictions around China were largely optimistic as the country had entered a recovery phase sooner than the rest of the world.
Fast forward to 2022, and the predictions are the polar opposite as China faces challenges on a number of fronts. To begin with, there is pessimism around China’s zero-COVID strategy, which even today sees entire cities fall under strict lockdown orders. This strategy has unavoidable economic impacts.
Secondly, uncertainty around power shortages, a potential housing crisis, and regulatory crackdowns have dampened enthusiasm for the country’s near-term prospects.
Finally, Xi Jinping eliminated term limits on the presidency in 2018, potentially positioning himself to lead China indefinitely. As the Chinese Communist Party’s 20th National Party Congress approaches later in the year, if the country is still on uncertain footing, it could create a tense political atmosphere in Beijing.
3. The Year of the Worker
Labor dynamics have stayed in the spotlight since the pandemic upended the world of work. There are a number of trends that emerge from this broader theme:
- The labor shortages that emerged during the pandemic will remain in place in 2022 and beyond. Certain sectors, such as cybersecurity, are facing acute shortages of skilled workers
- There is a broad consensus that the future of office work is “hybrid”. Companies that don’t offer flexibility will face a disadvantage in attracting talent
- The internet and social media have opened up a number of career pathways for individuals to earn an income beyond simply working for a company
- Work/life balance and burnout will be central points in discussions around workplace culture
4. The Changing Digital Ecosystem
If predictions are any indication, we’ll be hearing a lot more about NFTs and Web3. There are plenty of opinions on the former, and they run the spectrum from exuberant to outright bearish. Whether the hype surrounding profile picture NFTs dies down is anyone’s guess, but the technology has opened the door to a lot of experimentation for artists and creators.
On that note, experts are generally excited about the prospects of the burgeoning “Creator Economy”—a catch-all term describing the new technological ecosystem and growing infrastructure that is allowing individual content creators to monetize and flourish.
Another trend that is picking up steam is ecommerce centered around social media. The ability to purchase products straight from influencers is becoming more common on major social platforms, and ecommerce companies are creating more products to support influencers in their marketing endeavors.
5. Inflation Slowly Eases Off
Worries about inflation have always cropped up here and there, but in countries like the U.S., truly damaging amounts of inflation haven’t been seen since the 1980s.
Last year, the narrative changed.
After trillions of dollars of pandemic stimulus and borrowing, inflation suddenly came back on the radar—and it was not “transitory” as early central bank statements hoped. Now, going into 2022, experts expect higher-than-normal inflation levels to continue.
While inflation is expected to have an impact going forward, experts also see it leveling off (relative to 2021) as supply chain disruptions work themselves out.
6. Another Banner Year of Electric Vehicles
As climate change dominates more of the spotlight in 2022, regulatory actions will force automakers to consider the future of their fossil-fuel models.
Even as incentives are slowly rolled back in a number of markets, EV sales are expected to set new records this year. As well, electrification of fleets will be a trend that gathers momentum.
Industrial and battery metals like lithium and cobalt surged by 477% and 208%, respectively, in 2021, a trend that many experts believe will stretch into 2022.
The Good Stuff
Of the hundreds of sources we looked at, here were a few that stood out as memorable and comprehensive:
- Bloomberg’s Outlook 2022: This article compiled over 500 predictions from Wall Street banks and investment firms.
- The All-In Podcast’s 2022 predictions: This lively podcast, featuring Chamath Palihapitiya, Jason Calacanis, David Sacks, and David Friedberg, is always entertaining and informative. In this predictions episode, biggest business winners and losers is great, as is best performing asset.
- Eurasia Group’s Top Risks for 2022: This comprehensive group of articles covers a lot of ground, and offers up some very credible predictions as to what might happen on the world stage this year.
- Wood Mackenzie’s Predictions for 2022: Wood Mackenzie analysts offer 10 predictions for key developments expected in the energy and natural resources industries in 2022.
Lastly, if you’ve found our Prediction Consensus useful, we’re going to be diving even deeper into this subject matter in the coming weeks.
Our VC+ members get access to the whole Global Forecast 2022 series, which features a webinar and additional articles that flesh out predictions for the coming year in even more detail. You can learn more about it here.
The Periodic Table of Commodity Returns (2012-2021)
Energy fuels led the way as commodity prices surged in 2021, with only precious metals providing negative returns.
The Periodic Table of Commodity Returns (2022 Edition)
For investors, 2021 was a year in which nearly every asset class finished in the green, with commodities providing some of the best returns.
The S&P Goldman Sachs Commodity Index (GSCI) was the third best-performing asset class in 2021, returning 37.1% and beating out real estate and all major equity indices.
This graphic from U.S. Global Investors tracks individual commodity returns over the past decade, ranking them based on their individual performance each year.
Commodity Prices Surge in 2021
After a strong performance from commodities (metals especially) in the year prior, 2021 was all about energy commodities.
The top three performers for 2021 were energy fuels, with coal providing the single best annual return of any commodity over the past 10 years at 160.6%. According to U.S. Global Investors, coal was also the least volatile commodity of 2021, meaning investors had a smooth ride as the fossil fuel surged in price.
Source: U.S. Global Investors
The only commodities in the red this year were precious metals, which failed to stay positive despite rising inflation across goods and asset prices. Gold and silver had returns of -3.6% and -11.7% respectively, with platinum returning -9.6% and palladium, the worst performing commodity of 2021, at -22.2%.
Aside from the precious metals, every other commodity managed double-digit positive returns, with four commodities (crude oil, coal, aluminum, and wheat) having their best single-year performances of the past decade.
Energy Commodities Outperform as the World Reopens
The partial resumption of travel and the reopening of businesses in 2021 were both powerful catalysts that fueled the price rise of energy commodities.
After crude oil’s dip into negative prices in April 2020, black gold had a strong comeback in 2021 as it returned 55.01% while being the most volatile commodity of the year.
Natural gas prices also rose significantly (46.91%), with the UK and Europe’s natural gas prices rising even more as supply constraints came up against the winter demand surge.
Despite being the second worst performer of 2020 with the clean energy transition on the horizon, coal was 2021’s best commodity.
High electricity demand saw coal return in style, especially in China which accounts for one-third of global coal consumption.
Base Metals Beat out Precious Metals
2021 was a tale of two metals, as precious metals and base metals had opposing returns.
Copper, nickel, zinc, aluminum, and lead, all essential for the clean energy transition, kept up last year’s positive returns as the EV batteries and renewable energy technologies caught investors’ attention.
Demand for these energy metals looks set to continue in 2022, with Tesla having already signed a $1.5 billion deal for 75,000 tonnes of nickel with Talon Metals.
On the other end of the spectrum, precious metals simply sunk like a rock last year.
Investors turned to equities, real estate, and even cryptocurrencies to preserve and grow their investments, rather than the traditionally favorable gold (-3.64%) and silver (-11.72%). Platinum and palladium also lagged behind other commodities, only returning -9.64% and -22.21% respectively.
Grains Bring Steady Gains
In a year of over and underperformers, grains kept up their steady track record and notched their fifth year in a row of positive returns.
Both corn and wheat provided double-digit returns, with corn reaching eight-year highs and wheat reaching prices not seen in over nine years. Overall, these two grains followed 2021’s trend of increasing food prices, as the UN Food and Agriculture Organization’s food price index reached a 10-year high, rising by 17.8% over the course of the year.
As inflation across commodities, assets, and consumer goods surged in 2021, investors will now be keeping a sharp eye for a pullback in 2022. We’ll have to wait and see whether or not the Fed’s plans to increase rates and taper asset purchases will manage to provide price stability in commodities.
Apple’s Colossal Market Cap as it Hits $3 Trillion
Apple’s market cap recently hit $3 trillion. To put that scale into context, this visualization compares Apple to European indexes.
Apple’s Colossal Market Cap in Context
In January of 2019, Apple’s market capitalization stood at $700 billion.
While this was perceived as a colossal figure at the time, when we fast forward to today, that valuation seems a lot more modest. Since then, Apple has surged to touch a $3 trillion valuation on January 3rd, 2022.
To gauge just how monstrous of a figure this is, consider that Apple is no longer comparable to just companies, but to countries and even entire stock indexes. This animation from James Eagle ranks the growth in Apple’s market cap alongside top indexes from the UK, France, and Germany.
Let’s take a closer look.
Apple Takes On Europe
The three indexes Apple is compared to are heavyweights in their own right.
The FTSE 100 consists of giants like HSBC and vaccine producer AstraZeneca, while the CAC 40 Index is home to LVMH, which made Bernard Arnault the richest man in the world for a period of time last year.
Nonetheless, Apple’s market cap exceeds that of the 100 companies in the FTSE, as well as the 40 in each of the CAC and DAX indexes.
|Stock/Index||Market Cap ($T)||Country of Origin|
|CAC 40 Index||$2.76T||🇫🇷|
|DAX 40 (Dax 30) Index*||$2.50T||🇩🇪|
*Germany’s flagship DAX Index expanded from 30 to 40 constituents in September 2021.
It’s important to note, that while Apple’s growth is stellar, European companies have simultaneously seen a decline in their share of the overall global stock market, which helps make these comparisons even more eye-catching.
For example, before 2005, publicly-traded European companies represented almost 30% of global stock market capitalization, but those figures have been cut in half to just 15% today.
Here are some other approaches to measure Apple’s dominance.
Apple’s Revenue Per Minute vs Other Tech Giants
Stepping away from market capitalization, another unique way to measure Apple’s success is in how much sales they generate on a per minute basis. In doing so, we see that they generate a massive $848,090 per minute.
Here’s how Apple revenue per minute compares to other Big Tech giants:
|Company||Revenue Per Minute|
Furthermore, Apple’s profits aren’t too shabby either: their $20.5 billion in net income last quarter equates to $156,000 in profits per minute.
How Apple Compares To Countries
Lastly, we can compare Apple’s market cap to the GDP of countries.
|Country (excluding Apple)||Total Value ($T)|
What might be most impressive here is that Apple’s market cap eclipses the GDP of major developed economies, such as Canada and Australia. That means the company is more valuable than the entire economic production of these countries in a calendar year.
That’s some serious scale.
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