Yahoo Finance's Rick Newman discusses what the Biden administration faces in 2022, including supply shortages and overturning the abortion law.
BRIAN CHEUNG: Obviously there's a lot of chatter about what the Biden administration could be facing headed into an uncertain 2022, and for more on that, we'll bring in Yahoo Finance's Rick Newman with his year-end preview of what to expect next year.
And, Rick, you know, it's felt like 900 years, but people forget that it hasn't even elapsed a full year since inauguration. What should we expect the major challenges to be facing the Biden administration to be in 2022?
RICK NEWMAN: Well, I don't think there's going to be much happening legislatively. We know Biden wants to get this final package, the Build Back Better program, through Congress by the end of this year. He may or may not get it through. It could go into 2022, and there's a chance that Congress may never be able to pass it.
But Congress is not going to be doing much in 2022. It's obviously an election year. That tends to be a year when Congress doesn't do a lot. So the Biden administration is going to shift to regulatory policy and perhaps foreign policy and things like that.
Some of the surprises I'm looking for are a moderation of some of these shortages that have driven up inflation. I think we could see some of these shortages turn into surpluses because we are going to have-- sooner or later, we are going to have this demand shift back to services and away from goods, and look what's happening with the omicron variant. We're learning to live with it. That's what the markets reflect today.
So I think that's going to be an underlying part of getting back to normal or at least creeping back to normal in 2022.
JULIE HYMAN: I'm intrigued by number two there, Rick, and I assume what you're thinking about, of course, is this Mississippi law that the Supreme Court is now considering whether to overturn and how narrowly to overturn, right, if they should also overturn Roe v. Wade. I mean, how do you see that playing out next year?
RICK NEWMAN: If the Supreme Court either curtails or overturns Roe v. Wade, it will be the biggest political story by far of 2020. And we don't normally think of abortion as a business issue, but there are going to be second- and third-order consequences if this happens.
One of the things that it will affect is the outcome of the 2022 midterm elections. Republicans look like they have a pretty good shot of taking control of the House, most likely, and possibly the Senate. But if the Court would overturn Roe, that would change the calculation there, perhaps give Democrats a little bit more of some help.
And we talked about this last week, Julie. If the Supreme Court overturns Roe, there are at least 12 states that would automatically ban abortion and others that probably would follow. And there are a lot of big companies based in those states. I think we would see protests everywhere. We would perhaps see attempts to boycott companies in some of these states that ban abortion. So I may be getting way ahead of myself here, but look, this has been a big story in the offing, and something momentous could happen next year.
JULIE HYMAN: Yeah, and on that last point, I mean, we've seen that with other laws that have been passed on a state-by-state basis, you know, in Georgia, for example, or in states that were intransigent on the election results. We have seen some companies pull out of those states.
I want to ask about number three because that is most directly tied to what we do here, and that is what if a bear market happened? And, you know, it was sort of conventional wisdom and probably true conventional wisdom that President Trump really watched the stock market closely and saw that as a referendum on his performance. What's this sort of tie-in with the Biden administration?
RICK NEWMAN: Look, I don't know anything more than any of the other forecasters we have on every hour of every day on Yahoo Finance, but, you know, we know that the market has been-- stocks have been roaring since basically April of 2020, all because of the Fed put, the Federal Reserve and all the extraordinary measures. I mean, we know they're going to be pulling that away.
You know, all these Wall Street firms, they forecast what they think the stock market is going to be at the end of the upcoming year, and generally they're all upbeat. Well, they're not all upbeat this year. I was looking through Bank of America's forecast. They see the S&P at 4,400 at the end of next year. That would be about 5% lower than it is right now.
And look what's going to happen. I mean, the Fed probably is going to have to raise interest rates one way or another. We're going to see the end of some of these other things, and we may also see corporate profits-- you know, they're certainly not going to turn negative. They're not going to nosedive, but if the Fed's raising rates and let's just say corporate profits disappoint, that could be all it takes for a bear market. And we know we have a lot of analysts on frequently who say things look overpriced right now. So it's going to happen someday, maybe next year.