Valuations in mean zone, neutrality. Attractiveness in equity Europe, at recession prices.
Prioritize sectors that support a recession or stagflation environment:
- Health: stable income and margins supported by public spending.
- Agri-food: the climate crisis and the war in Ukraine put pressure on food prices.
- Staples: with the ability to pass price increases on to the consumer.
- Financials: benefiting from an environment of rising interest rates.
Long term opportunities:
- Technology: Although there may still be volatility, attractive multiples and higher growth than other sectors.
- Cyclical consumption: It usually bottoms out before the start of recovery.
- Renewables: the need to decarbonize drives huge investment plans in renewable energies.