Pundits say the stock market now has a near-term chance for a summer rally. But these three stocks should also do well beyond that.
There is no need to overstate the two-week recovery that most recently followed this year’s stock market correction. But you should take note of them. Investors grabbed again, many on the hunt for bargains – if only because they are the phase of the negative tone that is buzzing in the world and in the economy, and probably also the loss from inflation fed up
Have we bottomed out? Those who are honest will say they don’t know. Because of course the bears are lurking around every corner. And given the mood reflected in the media, celebrations shouldn’t be held just yet. However, the ubiquitous rumoring of this mood can also be used as a counter-indicator, so that an upward movement could soon follow.
This week it was mostly that Beige Book, which caused some optimism. According to this report of US-Notenbank Fed it will raise the key interest rate sharply again at the coming meetings – which the markets have long priced in. However, it was also indicated that no stronger increases are planned and that the Fed will then shift down a gear. There are also increasing signs that US inflation may have peaked.
In Europe, however, the fact that producer prices – a leading indicator of inflation – were 37.2 percent higher in April than a year earlier, as has just been announced, should make you sit up and take notice. Nevertheless, investors are no longer irritated by such individual data. They are now expecting one too rate step through the European Central Bank (ECB). At the beginning of last week, the head of the ECB Christine Lagarde said it expects an end to net asset purchases “very early in the third quarter” (experts say next week). This would prepare the ground for a rate hike.
Entering the market naively and with large sums of money is probably not the best idea. Because even if in China the Covid restrictions eased and in Europe a habituation effect occurs with the Ukraine war: the destabilizing one War with its complex consequences still rages. And that Jamie Dimon, head of the US bank, JP Morgan, which has warned investors to brace themselves for a “hurricane” hitting the economy, doesn’t exactly inspire reassurance. After all, he admits: “We don’t know if it’s a smaller one or Superstorm Sandy.”
However, JPMorgan in particular sees short-term opportunities for a summer rally because large investors will rebalance their portfolios. But which stocks would be suitable for this and beyond?