Insider Monkey

10 Oversold Global Stocks To Buy

Ramish Cheema
9 min read

In This Article:

In this piece, we will take a look at ten oversold global stocks to buy. If you want to skip our analysis of the global economic climate, then take a look at 5 Oversold Global Stocks To Buy.

Like July, August is full of surprises on the data front. After the U.S. economy grew quite strongly in the second quarter, investors started to worry whether the Federal Reserve might have more leeway in its ability to raise interest rates. This was naturally bullish for the dollar, and the greenback rose against its major currency counterparts and markets stood muted. However, another crucial set of data came through in August which shows that another one of the Federal Reserve's keenly watched indicators for interest rate decisions, namely the labor market, was weaker than expected.

The labor market data is released by the Labor Department and the figures for July show that the economy added 187,000 jobs in the month to mark a slight 2,000 increase over June's figures. The data also undershot expectations for 200,000 jobs, which is broadly believed as a crucial level below which the market starts to slow down. Naturally, on the surface, this provides the Federal Reserve with little room to justify additional interest rate hikes, but while currency markets reflected the true impact of the data release, stock markets showed little gains with the S&P 500 up by 0.29% and the NASDAQ up by 0.51%.

Immediately after the job market data, the president of the Atlanta Fed Raphael Bostic affirmed the belief that the job market appears to be slowing down in an orderly manner and we might not need any more interest rate hikes in the future. He dismissed concerns about higher wage growth that have created worries of contributing to higher inflation, pointing out that it will take a while for wage growth to track with inflation which has touched painfully high levels recently. Speaking to Bloomberg Television, the Atlanta Fed President shared:

We are today in a restrictive stance, and as inflation continues to fall, the degree to which it’s restrictive actually grows as that gap between the inflation rate and our interest rate widens. So I think that will put enough constraint on the economy that it will continue to slow. But again, I’m not expecting this to be a two-month or a three-month period.

So, while America might just avoid a recession this year, the global economic outlook is far more uncertain. China, which has been one of the fastest growing countries in the world, is struggling to deal with the aftereffects of a strict policy to fight the coronavirus. Additionally, the European Union is battling with a shakeup in the energy industry that has forced it to diversify away from Russian gas in the aftermath of the latter's Ukraine invasion. These have dampened global sentiment and created value for safe haven assets such as the U.S. dollar and gold.

and

Recommended Stories