ECONOMY - SEPTEMBER 2024 - UPDATE ON THE POSSIBLE RISKS.

SEPTEMBER 2024: POSSIBLE RISKS.

Economy is mined by several threats around the world.

These are not negligible and are already on going. One of them, for example, is the Chinese real estate crisis.

Even if it started one year ago, contrary to what it could be heard from the web, is still a major problem for the dragon economy, that is accusing a real slow down.

Other potential causes of further slowdowns: uk real estate is a latent risk, as much as an increase of unemployement in the USA, the actual biggest economy. If an increase in that parameter happen, stock market could surely be affected negatively.

It is not clear, obviusly, what the future holds, but together, these two parameters should drive us in our mid term decisions. For the next month it is really important that the ascending trend in the picture stops. (unemployement USA)

A good news is that the trend in Europe is the opposite, showing an improve in employement rate. (unemplyement in China seams stable)

HOW ARE PRICED STOCKS ACTUALLY?

The major stocks indexes around the world are pretty high, but not at their maximum. Don't forget anzwaz that some of the most overrated index are composed by a 35-40% of stock related to the high tech sector, and AI, Cloud and digitaliyation are a part of the economy that is not in crisis at all.

Citing for example Russell 2000, an index of smaller companies in USA, where tech stocks does not figure in high quantity, the average P/E is slower.

EUROPE:

It is important Europe too. The parameter here are related to the cost of energy during the last months. The war in Ukraine is still damaging the productivity of the bigger companies, automotive sector included. Only a fast transition to energy autonomy (renewable & nuclear) is going to save the area. Signs are good:

• Netherland and Germany are accelerating their renewable programs.

• Italy is near to a new legislation for the future of nuclear.

Let's consider all the parameters cited here to forecast the trend of the near future. Observing them will certainly help us to understand if problem are going to be solved or not.

Reminder: the biggest multiplier of risk nowadays is the escalation of the Ukraine conflict. IFEurope and Americawill permit Ukraine to use weapons also in the Russian territory, decisions and futher action from Putin could not be predictable. Until nothing is clearly defined, that is an issue to observe.

Actual status on stock market from my side: HOLD.