Bull on the stock market despite the crisis, experts are puzzled

The purchasing manager index, which measures the performance of the Swedish industry, fell to just over 42 in March. It is the lowest value in 25 years, provided the index is measured. The foreign market is at least equally infected. An astonishing 26 million Americans signed up as new unemployed last month. World GDP, the gross domestic product of all countries, is falling. The covid-19 vaccine can take years.

However, the Stockholm Stock Exchange has risen 22-23 percent from the lowest level in March. In the United States, there is talk of the “bull market,” most recently translated into bull fever on the stock exchange. The rapid change surprises expert trio Johanna Kull, Frida Bratt and Peter Malmqvist.

“I get nothing,” says Peter Malmqvist, an independent financial analyst, and spreads the word “take.”

– Of course, the policy rate has been reduced in the US. USA And the multi-government support packages are extensive, but the increase is more about irrational hopes for the last quarter of 2020 and that the market will recover by 2021, but that’s not so fast. This decline is not complete, predicts Peter Malmqvist.

Johanna Kull, Avanza economist, believes that stock exchanges look beyond the corona virus.

– Investors have already expected that the world’s next quarterly report from companies around the world will be a record. The question is what happens then? That countries are beginning to open up is a positive interpretation of the market. At the same time, the bank interest rate is record low. Capital must be invested somewhere and nobody wants to be off the stock exchange, says Johanna Kull.

Turbulence in the past two months is a textbook example of how difficult it is to make predictions.

It is not uncommon for the stock market to rise as GDP falls. Frida Bratt, Nordnet’s savings economist, points to two American phenomena called “Tina” and “Foma” that may explain why the stock market defies economic logic. “Tina” means “there is no alternative” and “Foma” means “fear of getting lost”.

– The stock market is more forward looking, but stocks have also proven to be a good long-term investment and no one wants to miss out on any upside potential, says Frida Bratt.

How should you as a regular fund saver think now?

– I know it is a cliche but it is still in the pot and I continue with their monthly savings. Capital investments should never be made in the short term, says Frida Bratt.

– The turmoil of the past two months is a textbook example of how difficult it is to make predictions. It is almost impossible for the individual saver to jump from tuva to tuva without an oblique. On the other hand, savers who are heavily invested in stocks may need to change their level of risk, says Johanna Kull.

– The basic recommendation is to do nothing. Possibly, the saver can take the opportunity to earn earnings on stocks. I have been involved in various crises and what generally happens is that there will be a downturn and only then will the market make a more realistic assessment, says Peter Malmqvist.

Which industries will be the winners and which will be the losers after the crown?

– The travel industry belongs to losers. Supermarkets, digital services, technology, and e-commerce are strong even after the crisis. These are companies like Ica, Axfood, Netflix, Facebook and Microsoft, says Frida Bratt.

– The real estate industry will change. It is a matter of increasing the number of bankruptcies in business, but also of a change in behavior. Coronan has accelerated digital development. Business travel will decrease and working remotely will become more common. In addition to digital e-commerce companies like Amazon, I think pharmaceutical and medical technology companies will be successful in the crisis, but care must be taken between industries in their investments, says Johanna Kull.

Peter Malmqvist believes that It is best to stay in Sweden.

– Sweden has not closed as much as other countries and should therefore do better. It is good to invest in companies that have the majority of their market in Sweden. The fact that several states now appear to be accelerating investments in 5g networks means Ericsson is a company that can do better than others, too.

– The real estate industry, which has performed best in the past 25 years, will now fall. Similarly, the transport sector with companies like Scania and Volvo trucks and dependent export companies in Europe is more uncertain, says Peter Malmqvist.