In contraction territory
Jul 26, 2022
Flash PMIs for July are pointing towards an economic contraction with the leading indicators falling below 50 for both services and manufacturing in the Eurozone. While employment remains solid for now, inflation, the Ukrainian war, on-going supply chain issues and rising interest rates start to take their toll on businesses. The mood is definitely not the highest in the corporate world, especially in Europe. As the economic data suggests the likelihood we could fall into a recession later this year in the Eurozone, we continue to stay defensive in our portfolios focussing on undervalued quality businesses and keeping some dry powder in terms of cash.