Sectors for the downturn and subsequent upswing

Dusseldorf BMW, Mercedes and VW have lost more than ten percent since the stock market downturn began in January. In contrast, the Telekom share increased by 18 percent. As is ideal for the stock market, stocks from sectors that are sensitive to the economy (cyclicals) are doing poorly in the current stock market downturn.

The same applies to IT, which has been booming for a long time. SAP collapsed by 30 percent and Infineon by almost 40 percent. On the other hand, companies from defensive sectors are doing well, including Telekom, the pharmaceutical giant Bayer and the branded goods manufacturer Beiersdorf. Both shares rose 15 percent.

Should investors therefore continue to avoid typical recession sectors in the future and continue to rely on the defensive à la Beiersdorf?

Doubts are warranted because the stock markets have been counting on a recession for eight and a half months, without this having become a reality. As a result, many stocks from sectors that are not currently popular are now cheap and others from typical “recession” sectors are expensive.