FINANCE - RECESSION IN STOCK MARKET - ALL STOCKS ARE UNDER-PRICED?

It is always important to understand the situation of the stock market related to the economical conditions. Sometimes, it could appears that indexes are too high in price to compare them to the overall economy status. Sometimes, however, it is in this way also because, important fact, index is ultimately a sum of elements.

Do all these elements behave in the same mode, at the same moment? obviusly not.

For example, safe have assets increase in price when other could decrease their value. When speaking about a recession, it is more a matter of sectors, than overall stock market. It is visible in the following fast check;

all the stocks indicated with YES are eventually the most over priced. It will be easy to note that these are extremely connected to safe assets: IT, utilities and partially energy.

The ones that are most underpriced, instead, will be identified with a NO.

Partially, means a good health status, without a showing peaks or local maximum.

• Automotive

  • Volkswagen NO

  • Ford NO

  • Stellantis NO

  • NIO NO

  • LI Auto NO

• WATCHES AND LUXURY

  • Louis Vuitton NO

  • Richemont NO

  • Swatch gruop NO

  • Brunello Cucinelli NO

• ENERGY

  • Edison NO

  • Enel SI

  • Eni NO

  • Total  PARTIAL

  • Shell PARTIAL

  • Bp NO

  • Edf NO(anche causa di politiche sul nucleare)

• TECH & IT

  • Tesla PARTIAL

  • Msft SI

  • Nvidia SI

  • Alphabet PARTIAL

  •  Meta SI

  • Amazon  SI

  • Netflix SI

  • Intel NO

  • TSMC SI

  • Qualcomm PARTIAL

• INDUSTRIAL CHEMICAL

  • BASF NO

  • Dupont  PARTIAL

  • Chemours NO

  • 3M NO

  • Dow inc NO

  • Air product and chemical PARTIAL

  • Air liquide NO

• FOOD

  • Hormel NO

  • Nestle NO

  • Hersey NO

  • TYSON FOODS NO

  • Danone NO

  • Mondelez PARTIAL

  • Hersel NO

• UTILITIES

  • Unilever SI

  • P&G  SI

  • J&J  PARTIAL

Some conclusions:

companies from same sectors behave traditionally in the same mode. IT is growing fast for many reasons, starting from the semiconductors market request and AI.

Different sectors could behave differently. Automotive sector is in crisis even if energy not completely. Industrial chemistry is in crisi due to a slowdown in the global production.

One important aspect: also food stock is down. Do not confuse the stocks listed here with the ones that produce basic and necessary food. Chocolate doesn't resist well during a recession.

Concluding: even if sometimes it is difficult to read an index, it is of primary importance to divide it in smaller parts. dividing stocks included in an index by sectors, it will give much more information to the analyser in terms of market understanding.

This post is intended solely for general guidance and information purposes. It is not to be used or considered as financial or investment advice, a recommendation, an offer to sell, or a solicitation to buy any securities or other financial assets. This post is not an offer document. It should not be regarded as investment research or an objective or independent analysis of the matters contained herein, and it is not prepared in accordance with regulations governing investment analysis.