After a meteoric performance in 2021, here’s what contrarian investors are predicting for 2022, according to Citi

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The Federal Reserve put its cards on the table for a rate hike and the stock market stood up and cheered. And Wall Street looks set to pick up where it left off on Thursday, with stock futures pointing north.

While a hawkish central bank turn – three rate hikes in the coming year to bring inflation under control and a faster decline – removed the loathed investor uncertainty, some aren’t sure all the euphoria makes sense. This is when the omicron coronavirus variant appears that may be ready to cause problems.

In our call of the day, Citi strategists have been tracking how aggressive and contrarian market moves have done this year – they have largely crushed it – and their bets for the year ahead.

First, the backdrop for contrarian choices, which strategists Robert Buckland, Mert Genc, ​​and Beata Manthey believe dates back to the pre-COVID and Christmas lunches between clients and brokers that often included stock picking contests. . The more outrageously opposite, the better, as many chose the bulls among the year’s biggest losers and the bears among the winners.

Here’s a look at that strategy for this year, with picks from the MSCI AC World Index. It shows that bullish bets on oil and banking stocks are paying off, as well as shorts on foamy tech stocks like Zoom Video ZM,
+ 0.98%
and names from China.

Opponents have also made winning bets on other assets – long oil, high yield bonds, short gold, caution in emerging markets, although this same view of US and other developed stocks has not gone well. Overall strategy reportedly returned 11% “healthy,” Citi said

“Their longs have benefited from the global upturn. Their shorts have benefited from regulatory crackdown in China. But that doesn’t mean that contrarianism is always a winning strategy. In fact, it’s only been delivered in 9 of the last 26 years, ”Buckland and the team said.

As for these 2022 bets, here is the overview:

“Opposites are now positioned for a global economic slowdown, which would help more defensive stocks outperform. They could also benefit from a significant Fed tightening, which could devalue expensive growth stocks. Chinese fiscal or monetary stimulus could also help nonconformists in 2022, ”Buckland and the team said.

Apart from another bearish bet in developed markets, opponents would sell oil, dollar and buy gold. Both bullish and bearish stock picks are shown in this chart, and note that Citi has stated that its own research colleagues are more positive about the former than the latter:

“Semiconductor shorts are a favorite sale, but our opponent would also object to this year’s rebound in Ford F,
+ 0.70%
and ConocoPhillips COP,
+ 0.04%.
Rapid decline in COVID concerns could help Moderna’s negative appeal to MNA,
+ 2.21%.
Another big business is short selling European luxury goods, where the returns have been spectacular in 2021, ”they said.

“Bullish calls from a sector trending against global utilities and consumer staples could also benefit from the economic downturn, as could bearish calls on energy and financials. Maybe our Christmas Luncher is looking for a Fed policy error, ”Buckland and the team said.

The buzzing

Social news site Reddit said it has filed confidential documents with the Securities and Exchange Commission to make them public. Naturally, the WallStreetBets crowd is all excited.

More central bank action: The Bank of England surprised with a 15 basis point rate hike, with European Central Bank decisions still to come. In addition, the Norges Bank of Norway increased its rates and the NOKUSD krone,
+ 0.57%
is in place. Turkey’s central bank cut rates by another 100 basis points. We guess what the USDTRY read,
+ 4.70%
do.

Homebuilder stocks have increased this year, but Lennar LEN,
+ 1.75%
dropped disappointing results Wednesday night and the title tumbles.

The data front is occupied by weekly jobless claims, housing starts, the Philadelphia Fed manufacturing index, industrial production and the Markit flash index of manufacturing purchasing managers.

With omicron in the background, Apple AAPL,
+ 2.85%
indefinitely delay when employees are required to return to the office and give each a bonus of $ 1,000. France has closed its borders to British tourists. Responding to a study from Hong Kong of 25 people showing that its COVID-19 vaccine does not neutralize the omicron variant, China’s Sinovac said three injections offered 94% protection in a test of 48 people.

Bruce Springsteen is said to have sold his entire musical catalog, including hits such as “Born in the USA” to Sony Music Entertainment SONY,
+ 2.69%
for an estimated amount of $ 500 million.

A tragic inflatable house accident in Tasmania, Australia left five dead and several injured.

The steps

YM00 equity futures contracts,
+ 0.64%

ES00,
+ 0.65%

NQ00,
+ 0.53%
are up post-Fed, with European stocks SXXP,
+1.41%
also in rally mode and the Nikkei NIK,
+ 2.13%
after leading a pretty solid day in Asia. The dollar DXY,
-0.58%
is down, especially against the pound GBPUSD,
+ 0.74%
on this rate hike by the BoE with the TMBMKGB-10Y gilts,
0.817%.
Gold GC00,
+1.37%
and CL00 oil,
+ 0.66%
both rise.

Top tickers

Here are the best tickers on MarketWatch, at 6 a.m. EST.

Teleprinter Asset name

AMC,
+ 0.65%

AMC Entertainment

TSLA,
+1.82%

You’re here

GME,
+ 0.61%

GameStop

DXY,
-0.58%

US dollar index

NIO,
-4.67%

NIO

TMUBMUSD10Y,
1.471%

10-year US Treasury bill

DJIA,
+1.08%

Dow Jones Industrial Average

AAPL,
+ 2.85%

Apple

ES00,
+ 0.65%

S&P 500 Futures

NVDA,
+ 7.49%

Nvidia

The quote

“But all the things we know are bad, the main one being the speed at which this is moving. It is moving at an absolutely phenomenal rate. That was the warning from UK Chief Medical Officer Professor Chris Whitty to limit social contact, after new daily infections hit 78,610, the highest since the start of the pandemic.

Random readings

A song composed entirely of bird sounds blew the charts in Australia.

A pioneer bus driver in Manchester says she is on the verge of losing her job because she is too small.

You could retire from those old comics

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