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What Apex Financial’s Baker expects from the market this year

Dow Jones, the S&P 500, and Nasdaq price forecast ahead of renewed COVID-19 restrictions

The S&P 500 index is off to a good start this year, but Apex Financial’s Lee Baker says it’s unlikely the benchmark will rally as strongly in 2022 as it did last year.

Baker’s remarks on CNBC’s ‘Worldwide Exchange’

Baker does see momentum for a positive 2022, but an over 20% gain, he said, was hard to imagine. Revealing his expectations from the market this year on CNBC’s “Worldwide Exchange”, Baker said:  

The momentum is there. But are we going to be sitting here in December looking back at a 20% plus gain in the market? I just don’t see that. There are some tailwinds that could knock us off. But overall, I think we’re set up for another positive year for the market and the economy in general.

His outlook aligns with Byron Wien’s of Blackstone, who also expects a flattish market this year. A day earlier, he said the U.S. Fed could raise rates four times in 2022 because inflation is here to stay.

Tech will be less popular

According to Baker, investors will continue to rotate out of tech this year and into the likes of industrials, but he still doesn’t anticipate a huge sell-off in Apple, Microsoft, and others.

I’m a believer of the ongoing rotation. We still have that pent-up demand issue where the pricing pressures and the supply chain disruptions will come to bear in some of the industrial names. Having said that, I’m not calling for some huge drop off in the likes of Apple and Microsoft.

Also on Wednesday, GenTrust’s Mimi Duff also said in a separate interview that investors will rotate out of tech in 2022 and into banks and infrastructure. SPX is up 0.5% for the year at the time of writing.

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