Global CIO video: "We continue to expect solid growth in 2022"
Articles & stories

Global CIO video: "We continue to expect solid growth in 2022"

Financial markets have been subject to increased volatility recently, caused in part by the emergence and subsequent rapid spread of the Omicron variant of COVID-19.

Persistently high inflation – with US consumer price inflation at a 40-year high in December – is another area of concern, and central banks including the US Federal Reserve have brought their tightening plans forward. In response, we witnessed a sharp rotation in equity markets away from technology and growth-oriented stocks in favor of European markets and saw a sharp rise in global government bond yields.

In an ad-hoc meeting in late December, the Credit Suisse Investment Committee (IC) decided to bring equity portfolio allocations back from a tactical overweight to neutral, as we sought to mitigate risks in our portfolios.

Watch the new House View video with Philipp Lisibach, Chief Global Strategist

By accessing the videos and/or podcasts in this page, you hereby consent to Credit Suisse disclosing your full IP address to YouTube and/or SoundCloud for the purpose of enabling you to view or listen to the content hosted in those platforms. These third party platforms are not operated or monitored by Credit Suisse, and your IP address and any other personal data collected, processed or stored by these third party platforms will be subject to their own privacy policies, and Credit Suisse will not be responsible for their treatment of personal data.

In the most recent IC meeting in January, we confirmed this neutral tactical allocation, acknowledging that equities benefit from favorable liquidity and financing conditions and continue to offer a yield advantage over high-quality bonds. We still have an underweight in government bonds and expect yields to rise further amid monetary tightening and robust growth.

Over a medium-term horizon, we retain the view that equities provide attractive return prospects. We expect that economic growth in 2022 will be above trend, albeit slower than in 2021, and that the Omicron headwinds should soon ease.