From Morningstar: 2024-10-22 11:04:00

The third quarter volatility shifted sector valuations, closing opportunities in healthcare and utilities while opening up new ones in energy and technology.

Consumer defensive stocks like Unilever and Procter + Gamble have been raising prices in line with inflation to protect margins, but as inflation drops, firms can focus on more effective marketing strategies.

Despite rising volumes and creeping valuations, skepticism remains in the consumer defensive sector due to macroeconomic uncertainties, creating stock opportunities in household product and beverage firms.

Energy sector performance has waned due to OPEC’s output increase, weak Chinese economic data, and lower demand for oil, although long-term potential still exists due to limited substitutes for oil.

Tech stocks, particularly related to AI, suffered losses in August and September, with disparities in valuations within the European tech sector, offering opportunities in undervalued stocks like ASML.

Technology performance has closely mirrored the European market, serving as a bellwether for market confidence, highlighting the importance of monitoring tech stocks and capitalizing on opportunities in the sector.



Read more at Morningstar: Equity Sectors to Watch for the Remainder of 2024