“December is here before its June…How did it get so late so soon?”
— Dr. Seuss
The key for writing any monthly report is not to do it too early, especially during the end of November which saw the word Omicron become much better known than just by followers of the Greek alphabet. Whilst progress against COVID-19 challenges have helped almost all developed market stock markets generate attractive returns year-to-date, many indices fell during the second half of November following concerns about the new virus strain. It also led to a fall in bond yields despite continuing inflationary fears which has meant – during 2021 – over thirty-five global central banks collectively raising their interest rates nearly a hundred times.
The final weeks of the third-quarter corporate earnings season during November on average performed strongly, reflecting a global economic backdrop that has generally continued to improve along with the ability of most management teams to find ways of countering any supply-side issues. Corporate expectations for 2022 have consequently been heightened, a backdrop that normally would be associated with a positive end to the year. However – consistent with a continuous range of surprises for global investors over the last two years – 2021 still has some scope for a few surprises, even before we start thinking about a Christmas break.
…the third-quarter corporate earnings season during November on average performed strongly.
By mid-December there should be a clearer view of the realities of the Omicron virus and whether Christmas gatherings and travel are going to be much materially easier than last year, in line with general expectations a couple of weeks ago. It will also help discussions at the Bank of England and other important central banks in about two weeks time.
Certainly, recent shifts in both inflation and employment numbers have increased the rationale for the first Bank of England interest rate rise for a number of years. Virus uncertainties will have to be considered but only the fear of a significant lockdown is set to stop a rise in exceptionally modest interest rates – to slightly less modest interest rates – over the next year. Nevertheless, even modest interest rate shifts have to be acknowledged by both highly indebted and highly valued investments.
It was positive to read some agreements and climate change progress at the COP26 meetings in Glasgow in mid-November. And whilst the radically enhanced growth in carbon and related matters has become apparent globally, much remains to be discussed and achieved. The COP27 meetings set for November next year in Egypt will be a big focus for all.
It was positive to read some agreements and climate change progress at the COP26 meetings in Glasgow in mid-November.
As the Greek philosopher, Heraclitus once observed, ‘there is nothing permanent except change’. On that basis prospects for 2022 should not be overly worrying, despite COVID-19 challenges, volatile stock markets, inflationary concerns and growing environment appreciation. 2021 has been a very positive year for most investors – certainly compared to many consensus thoughts at the start of the year. And returns over the last twelve years have been simply phenomenal for almost all investors. 2022 will be full of both opportunities and threats but that is what makes the investment world interesting…as shown by the need for a few remaining insights and answers in December.
2022 will be full of both opportunities and threats but that is what makes the investment world interesting…
The information contained in this article is for general consideration only and any opinion or forecast reflects the judgment of the Research Department of Raymond James & Associates, Inc. as at the date of issue and is subject to change without notice. Past performance is not a reliable indicator of future results.
You should not take, or refrain from taking, action based on its content and no part of this article should be relied upon or construed as any form of advice or personal recommendation. The research and analysis in this article have been procured, and may have been acted upon, by Raymond James and connected companies for their own purposes, and the results are being made available to you on this understanding.
Neither Raymond James nor any connected company accepts responsibility for any direct or indirect or consequential loss suffered by you or any other person as a result of your acting, or deciding not to act, in reliance upon such research and analysis. If you are unsure or need clarity upon any of the information covered in this article, please contact your wealth manager.
Black MondayOn 19 October 1987, the stock markets experienced a dramatic plunge that prompted many firms to shut down their trading desks and turn off their phones to minimize internal losses. Raymond James refused to do the same. Our desks stayed open to help meet clients’ needs, resulting in our first and only unprofitable quarter since the firm went public in 1983. |
 |
Who was Raymond James?The Raymond in our name is actually from Edward Raymond, owner of a 15-employee mutual fund sales group, Raymond and Associates, along Florida’s west coast. He sold his company to Bob James on 15 July 1964, on condition that the surviving firm be called Raymond, James & Associates. Three days after the sale, Ed Raymond was involved in a near-fatal automobile accident and never joined the firm. Nonetheless, even after Raymond had passed away, Bob James insisted that his name remain on the door – ahead of James’ own. That was a promise he made to Ed Raymond three days before the accident, and Bob James was a man who kept his promises. |
|
Bear Market of 1974The severe bear market of 1974 threatened the existence of Raymond James, which was bleeding capital by the day. Tom James, his father and other leaders took extreme measures to keep the firm afloat, slashing costs, foregoing paychecks and even attempting to sell the firm for just enough capital to protect client assets and retain as many associates as possible. The story could have ended very differently if not for a sharp upturn and continued rebound in the stock markets late in the year. |
|
Taking Raymond James PublicWhen consideration was being given to taking Raymond James public, Tom James penned a letter to shareholders (largely employees at the time). ” … the public offering should be considered as a statement of our independence. While this is a psychological rather than an economic rationale, it is nonetheless very important. We have asserted for some time that we are not interested in becoming a small part of a very large corporation. That assertion results mainly from the inclinations of management rather than the economic benefits associated with either alternative. The public stock offering affords us the opportunity to enjoy a little bit of the best of both worlds. While shareholders will be given liquidity at fair market value, we will still have the ability to control our own destiny.” After 40+ years of Tom’s leadership, upon becoming CEO, Paul Reilly was often questioned about whether the company might ultimately surrender its cherished independence and be acquired by some larger entity. His response: “Not while I’m around.” It’s a theme that continues today. |
 |
