Curse or Blessing? delivered the first buying signal in this year after headwinds and signals that market participants start to become fearful again through the Russia-Ukraine conflict. The algorithm has also taken note of the recent trends in sectors ranking the Basic Materials sector first.

It was hard to believe. Usually, chart technicians say that if the markets gain in the morning and sell in the evening, this shows a clear sell signal. Although this was the case yesterday, our global indicator told us to buy this morning which we did. According to our algorithm, we should not have made any investments now for 2 months and 4 days. This time is over now. It tells us to buy the gains again.

Our sector screening showed three sectors that are of particular interest:

  • Basic Materials
  • Consumer Defensive
  • Utilities

It is not surprising for me that constituents of the Basic Materials sector have been trending throughout the recent months. Not only have increasing steel prices helped this sector to gain significant revenue gains, but they have also been supported by strong demand for weapons from the defense industry. Due to the Russian actions against the Ukraine, European countries have finally decided to increase their defense spending by billions. Weapons, aircraft, tanks - they all have some relation to the steel industry. And the strongest spender of this sector is the United States. Germany plans to spend extra €100bn on defense. New aircrafts shall be delivered by an American icon, Lockheed Martin. 

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