Eva Ados, COO and Chief Investment Strategist at ERShares, recently appeared on Yahoo Finance, highlighting winners and losers as volatility persists.
Russia Contagion to Drag Europe Down
The Russian contagion and spillover effects from reduced trade and supply disruptions will increase the likelihood of a European recession or stagflationary period in the coming months. Investors are concerned with the rising inflation risks caused by energy, food price shocks, and spiraling prices.
Ados also indicates the effect of Europe’s output with the removal of Europe’s key partner, Russia, adding to its problems. There is added sentiment and implied fear of the consumer related to the slowdown in the economy. Moreover, stalled global GDP growth, conflict with Russia, and China slowdown is expected to generate a flat GDP global growth.
“[Europe has signaled] increased costs of food and energy, and potential disruption of their energy system– 45% of their gas comes from Russia. And now, we’re adding into this slower growth, which was already slow heading into 2022”, Ados remarked during the interview.
Winners and Losers as Volatility Continues
Few bright spots exist within this marketplace, though Ados believes technology stocks will continue to prosper through astute working capital reallocation and operational scale less dependent on labor costs as revenues grow.
“We’re seeing a shift from short-term treasuries towards equities. And then in equities, we continue to like financials because of the inflationary environment. And again, we like tech, and we think it’s well-positioned to end the year higher.”
She concludes her comments with insights regarding sector allocations and notes that now, more than ever, picking the right sector and geographical exposure is key to performance in 2022. She remains cautiously optimistic for the remainder of the year, albeit expecting choppiness to continue, especially with the US approaching double-digit inflation.
Credit to Yahoo Finance
https://money.yahoo.com/video/tech-companies-nimble-margins-amid-192605178.html
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