After US inflation peaked in 41 years, pressure on the US Federal Reserve (Fed) to tighten monetary policy. By continuing to raise interest rates at full speed It aims for the policy interest rate at the end of this year to be 3.4% from the current 1.50-1.75%.
However, raising interest rates to curb inflation will also cause the economy to slow down. At the same time, there is an inverted yield curve signal, or government bond yields have turned upside down. Short-term bonds offer higher yields than long-term bonds.
after people flock to buy long-term bonds because of concern about the economic situation at the moment As a result, long-term bond yields fell. Currently, yields on 10-year and 2-year bonds have narrowed until they are close to zero. In the past, when the Inverted Yield Curve occurred, the US economy would soon enter a recession.
Recession concerns create volatility in global capital markets. Last week, world stock markets continued to sell. At the same time, crude oil prices fell. with a drop below 100 dollars a barrel. because looking atIf an economic recession actually occurs, it will affect purchasing power. causing the demand for oil to decrease as well
However, we have to wait for the official announcement of the US GDP figures for the second quarter of 2022 that will come out. After the first quarter GDP was negative -1.6% qoq. If the 2nd quarter numbers come out negative continuously It is considered a full recession. which has a very high probability The US Federal Reserve (Fed) Atlanta Branch has forecast 2Q GDP shrinking -2.1%.
sideAsia Plus Securities It states that the research department has analyzed and searched for stocks that tend to outperform during the Technical Recession. In the past 15 years, there have been two Technical Recessions.Subprime crisis during the 3rd quarter of 2008 – the 2nd quarter of 2009 During that time, the S&P500 index fell -38%, while the SET dropped -22.3%.
and rangeCovid-19 Crisis During the first quarter of 2020 – the second quarter of 2020 The S&P 500 index fell -20% and the SET -15.2%. If the average came out during the two Technical Recessions, the SET dropped -18.8% on average.
But at the same time, found that there are stocks that outperform the market well, which are export-related stocks.agricultural productsan average increase of 31.7%, food groupdecreased by an average of 11.9%
and low volatility stocks such as ICT Groupdropped an average of 14.6%, retail groupan average increase of 0.6%, andinsurance groupdecreased by an average of 12.6%, so if the market fell, it is recommended to collect all 5 groups
sideKasikorn Securities According to the study during the recession, the stocks that will outperform are the Defensive Groups, namely 1.hospital group Recommend BDMS, BH, EKH 2. ICT Group Recommend TRUE, DTAC
3. Consumer products Introducing CPALL and 4.power plant group Recommend BGRIM, GPSC, GULF
The group that will underperform during the recession is the Global Play group, which is the Petrochemical group. Electronic Export Group automotive export group should delay investment in the long term