The inflation crisis of 2021-2022 was expected to be over and things normalized going into 2024. But especially US inflation seems to be sticky and that leads to interesting trends for stock sectors.
Expert Andreas Steno explains: "We have never seen a recession in the US economy with conditions as easy as now and there are on the contrary signs of an improving cyclical economy instead.
Other regions, such as Japan, the UK and the Euro zone have seen “bread and butter” recessions in recent months, which makes the inflation battles somewhat more serious and stubborn. This will likely also be visible in USD inflation spreads versus peers in coming months.
Maybe the best way to trade this environment, is to continue to bet on a reflationary USD market environment relative to peers in Europe?"
Which trading bets might be beneficial in this environment?
Andreas Steno continues: "Stocks within industrials and materials look damn cheap in equity space, if the cyclical improvement continues. We will look to add exposure in these cyclical sectors in the coming weeks."
On the other hand, stocks within information technology (such as tech companies) are looking a bit overpriced in this scenario.
Read the entire analysis right here: https://stenoresearch.com/steno-signals-87-inflation-is-back-position-accordingly/