Bank of America and JPMorgan named global stocks and sectors that fell and could be trading near the bottom, while Citi said ‘buy this dip’. This comes at a volatile time for the markets. After weeks of losses, the S&P 500 and the Dow Jones Industrial Average posted big gains last week. The Dow finished up 6.2%, ending an eight-week losing streak. The S&P 500 ended the week up 6.5% and the Nasdaq ended the week up 6.8%, with both indexes ending seven-week losing streaks. Meanwhile in Europe, the pan-European Stoxx 600 ended the week up almost 3%. In a note dated May 25, BofA named a European list of “high-quality stocks that have deteriorated the most this year” as Screen of the Week. “In our Screen of the Week, we highlight high-quality stocks that have underperformed the market more year-to-date. [year to date] but have better revenue support and a higher median FCF than the industry [free cashflow]”, said analyst Paulina Strzelinska. Topping the bank’s list – ranked in order of quality – was Swiss industrial company Kuehne Nagel, followed by Danish jewelry brand Pandora and Italian healthcare company DiaSorin, transport company Maersk, British-American heating company Ferguson and automaker Stellantis came next, followed by luxury clothing brand Moncler, IT consultancy Reply and homebuilder Taylor Wimpey. JPMorgan Opportunities JPMorgan said the retail sector had potentially hit bottom: “Retailers have tracked the decline in consumer confidence, but this could be as bad as it gets,” its analysts wrote in a statement. research note dated May 23. first quarter, while Target shares fell sharply on May 18 after also falling short of what analysts you were expecting. »[Retail] has already performed poorly and some high-profile earnings warnings are now behind us,” the analysts led by Mislav Matejka wrote. Read more Citi’s bear market model indicates it may be time to buy the dip Strong company charts Kyle Bass says US will be in recession next year, with prices l Food and Oil that will continue to rise Marks and Spencer and Swedish clothing company H&M, both rated neutral by JPMorgan, are also listed as retailers on the bank’s European Top Picks list. Also on his list is Portuguese grocery group Jeronimo Martins, which he rated as overweight. The bank also said Consumer spending is expected to be “relatively resilient.” analysts said. Citi: “Buy This Dip” Citi said it might be time to start buying stocks again in a May 26 research note titled “Bear Market Checklist: Buy This Dip.” The bank analyzed 18 indicators – which could become ‘red flags’ – such as company fundamentals, stock valuation and funding activity as part of its bear market checklist, or BMC. . “At any time, some of them may give warning signs, but usually not enough to suggest a long-term decline,” said analysts led by Robert Buckland. Citi did not pick stocks but said it preferred Europe or emerging markets as the number of red flags in those regions is currently lower than the US “European BMC looked less frothy at the end of last year, at just 6/18 red Notably, valuations haven’t been particularly stretched, unlike the U.S. European BMC is now down to just 4.5/18 red flags We use different factors in Emerging Markets BMC, but the story is similar to Europe’s For concerned investors, is too early to make the jump to the US market, maybe buying the dips in Europe and emerging markets is a safer option,” the bank said. “The BMC was never intended to be a market timing tool, to predict when the next correction might start or end. Instead, it was designed to suggest action when the inevitable declines occur” , the bank noted. – CNBC’s Fred Imbert and Tanaya Macheel contributed to this report.
A Wall Street sign is pictured at the New York Stock Exchange (NYSE) in New York, March 9, 2020.
Carlos Allegri | Reuters