– We have a macro situation that is extremely challenging, with central bank governors who are clear that inflation will go down even if it has major consequences for the stock markets, says Gaute Eie, Investment Director at Eika Kapitalforvaltning to DN.
Wednesday ended with a sharp fall on Wall Street, and a sharp fall in Asia on Thursday morning Norwegian time. Around lunchtime, the French CAC 40 index is down 2.1 percent, the German DAX index is down 2.0 percent while the Stoxx 600 is down 2.2 percent. The FTSE 100 in London is down 2.4 percent.
On the Oslo Stock Exchange, the main index is down 1.85 percent. The big question is when to turn.
– Maybe we should just go down another five percent before it turns around? Or are we going to lose ground contact completely and experience that the bottom falls out of the markets? And in previous recessions, the price of oil has also fallen to 20 dollars. Will the same thing happen this time ?, Eie asks.
According to the newspaper, he believes for the time being that we will avoid a very hard landing.
– At the same time, this means that there will be many good purchases in the future. Look at companies like Nordic Semiconductor and Schibsted / Adevinta which are down around 50 percent. But we think the macro will probably go a little further down. We are therefore currently on hold. Then we try to turn the portfolio over to companies that make the most money today. Like oil and fish, says Eie to DN.
We have to go back to October 2020 to find the last time the Dow Jones fell as sharply as Wednesday.
As much as 3.56 percent of the value was shaved off. It was also difficult for the S&P 500, where only 8 of the 500 companies that make up the index ended the day with price increases.
The Dow Jones fell 3.56 percent on Wednesday, corresponding to a decline of 1,161 points, to 31,493 points in total. Nasdaq fell by as much as 4.73 percent, to 11,418 points.
The value of the S&P 500 fell by 4.03 percent, to 3,924.
– Obviously harmful
Hang Seng and the other Asian stock exchanges also experienced a sharp fall on Thursday morning Norwegian time. The markets are now at a crossroads, according to Mark Konyn of AIA.
– On the one hand, investors are worried about whether inflation will damage earnings and change pricing in the market. It is obviously detrimental to investors. But on the other hand, they are just as worried about the growth opportunities, he tells CNBC.
He points out that both Target and Walmart downgraded the guidance which shows that margins are under pressure.