The WisdomTree Q2 2022 Economic and Market Outlook in 10 Charts or Less

“I just dropped in to see what condition my condition was in”

(By Kenny Rogers & The First Edition, 1967)

When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise. We believe the five primary economic and market signals that provide perspective on where we go from here are GDP growth, earnings, interest rates, inflation and Central Bank policy.

GDP Growth

While decelerating from the pace of 2021, U.S. economic growth is expected to remain positive in 2022, pending further unexpected inflation and geopolitical news. The atrocities in Ukraine are unfathomable, and the continuation of the war plus further Western sanctions may result in significant inflationary and supply shortages as we move through the year. Consensus estimates for GDP growth in 2022 are roughly 3%–3.5%.

The Atlanta Fed “GDPNow” estimate pegs Q1 2022 GDP growth at a sluggish +0.9%, as COVID-19, rising inflation, ongoing supply chain issues and serious geopolitical tensions all weighed on economic activity. We maintain our outlook, however, that we may witness another “economic reopening” cycle as we move through the year.