Real GDP Growth in European Union
Source: EUROSTAT
“Following the unprecedented fall in euro area output in the second quarter of 2020, economic growth is set to rebound in the third quarter, before falling again in the fourth quarter.”
“Incoming information signals that the euro area economic recovery is losing momentum more rapidly than expected, after a strong, yet partial and uneven, rebound in economic activity over the summer months. The rise in COVID-19 cases and the associated intensification of containment measures is weighing on activity, constituting a clear deterioration in the near-term outlook.”
ECB Economic Bulletin, Issue No.7/2020
Recommended Industry Allocation
Should the economic rebound in Europe continue, stocks, belonging to the cyclical industries will outperform a broader market. However, the economic outlook is highly uncertain and stock market volatility is expected to remain high. So, a portfolio should include stocks from the defensive industries as well.
Please use the diagram only as a broad indication what industries could have growth potential under current economic conditions as the industry performance is influenced by many different factors, not only by a business cycle.
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