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The correction in the markets has made many stocks cheaper. That and two other reasons give these four stocks upside potential.
It’s been a long time since investors were happy to be European. Aside from some exceptional companies, the Frankfurt to London indices were not what could be described as inspiring for a long time. The music was played in other places, especially in the United States. And again with the technological values, the symbols of the future.
The tide turned in mid-February. Rising bond yields on fears of inflation have led to the sale of securities that had previously skyrocketed. Here, in the middle of their correction, the main European indices are robust. The EuroStoxx 50, solid as a rock. The DAX at its highest point. Its cyclical nature, an advantage of the hour, made it possible. Tech values are not your thing. Certainly, anyone who now proclaims the triumph of the old economy over technology could be wrong quickly and especially in the long run. And as for the current correction, after a sensational year on the Nasdaq US tech exchange, it was time to vent.
The trigger for this could still keep the stock markets busy. Rising bond yields, which is detrimental to stocks, remains a problem for now. It is important to keep in mind what Ibrahima Kobar of Asset Manager Ostrum told Reuters: “As the increase (from bond yields, note) it is linked to an economic recovery, it should have little impact on financial markets, “he said. “But if interest rates continue to rise for fear of overheating or inflation, markets could stumble.”
They are always nervous. And if someone like the chairman of the US Federal Reserve, Jerome Powell, pointed out that there was no need to act this week by relativizing expected inflation as a one-time effect of a wave of consumption after the pandemic, they were disappointed. They now expect the ECB to further ease monetary policy.
Those who prefer to look at the stock market from the sidelines for the moment have good reason to do so. For example, the uncertain development of the pandemic. But we tend to move towards a normalization of life. In the long run, there will be no way to avoid stocks. And in the short term, the capital market should receive a boost from the new economic aid in the United States. Who could benefit?
