Investors’ concerns about the pace of economic recovery due to the resurgence of the COVID-19 cases are expected to foster stock market volatility in the near term. Most stocks are still trading at high valuations, but because a lower-than-expected increase in the CPI has generated some optimism, we think it could be wise to bet on quality stocks Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC), Telefónica (TEF), and CNH Industrial (NYSE:CNHI), which are currently trading at affordable prices. Read on.Because investors remain concerned about the pace of economic recovery due to the resurgence of the COVID-19 cases, the stock market is expected to remain volatile in the near term. According to an AP report, the United States recorded 26,800 COVID-19 deaths and more than 4.2 million infections in August.
Also in August, the consumer price index (CPI) increased 5.3% from a year earlier and 0.3% from July, which was a lower increase than was expected. In addition, during the Federal Reserve’s recent annual Jackson Hole economic symposium, Fed Chair Jerome Powell reiterated that high inflation is temporary. With these factors buoying investors, quality stocks trading at affordable prices could be wise bets now.
Fundamentally sound stocks Telefonaktiebolaget LM Ericsson (BS:ERICAs) (publ) (ERIC), Telefónica, S.A. (TEF), and CNH Industrial N.V. (CNHI) are currently trading below $20 per share and look undervalued considering their growth prospects. So, we think it could be wise to scoop up their shares now.