Stock market corrections often bring with them a change of favorites. This also seems to be the case after the shocks at the beginning of August. While the long sought-after semiconductor stocks are recovering only tentatively, defensive consumer staples and healthcare stocks are in demand. The Market presents five attractive Swiss stocks.
by Gregor Mast (German version)
The earthquake was short and violent: at the beginning of August, the global stock markets were hit by severe turbulence. Indices such as the Nikkei 225 plummeted by almost 20% within two days, the biggest two-day slump ever. But after less than a week, the spook was over, at least for the world share index calculated by MSCI. Driven by the prospect of an imminent interest rate cut by the US Federal Reserve, it reached a new all-time high.
This sounds like business as usual, but it is not, because a major shift in preferences is taking place beneath the surface of the index. Semiconductor stocks, which were hyped until the height of the summer, are recovering only tentatively, while defensive stocks from the consumer staples, healthcare and utilities sectors, as well as insurance and real estate stocks, have taken over the reins.
“Corrections usually result in a changing of the guard”, comments Thierry Borgeat from the Zurich-based financial boutique arvy on the latest stock market action. “The stocks that led the bull market are displaced by a new narrative.” He believes that this will also be the case this time. “Semiconductor stocks have probably reached the top,” he says, justifying his caution not only with the behavior of share prices but also with the looming recession.
USA: yield curve and recessions, 1988 to September 2024
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