Market outlook March – energy crisis or buying opportunity?

Fear of AI disruption characterized the markets in February

Throughout February, however, there was fear of AI disruption (AI disruption) that created the most turbulence in the markets, in the form of large swings in individual stocks as a result of various news related to AI. While the development on the surface was good, with global stocks rising 1.2% during February (measured in local currency), there was indeed a lot of drama and significant movements "under the hood."

Thus, we see that there are four factors that have driven the markets recently:

1) fear of AI disruption,

2) solid prospects for both the real economy and corporate earnings in the coming year,

3) that investors are increasingly looking for alternatives to dollar-based investments, and

4) that there are concerns about over-investment among the large American technology companies.

These four factors also reinforce each other. AI disruption has so far tended to benefit companies involved in physical asset management, while it has negatively affected companies engaged in information management, to put it bluntly.

As companies involved in physical asset management, such as in the energy, industrial, and commodity sectors, also tend to perform well when the global economy is in an upswing, points 1) and 2) reinforce each other.

Point 3), the fact that many investors are looking for alternatives to the US as an investment destination, also seems to point in the same direction. This is because both Europe and Emerging Markets, which investors are flocking to, have more of these physically and cyclically exposed sectors than the US.

The last point, namely that many are concerned about over-investments among the large American technology companies, may also contribute to investors seeking to move away from the US and technology, which has long been the region and sector that has attracted the most capital.