Concerns over the Federal Reserve’s tightened monetary policy to fight multi-decade-high inflation, the Russia-Ukraine war, and a potential economic slowdown have dampened investor sentiment so far this year. Furthermore, many analysts believe that the Fed’s aggressive interest rate increases could limit economic growth and push the U.S. economy into a recession. According to research from Moody’s Analytics and Wall Street economists, the odds of recession stand at 30%.
As a result, growth stocks have witnessed a sharp sell-off over the past few months. However, this has led several quality growth stocks to trade now at attractive valuations. “There are plenty of growth companies that will continue to exhibit robust and durable profitability, and those names that look set to exceed expectations are particularly attractive,” said Tai Hui, Chief Market Strategist, Asia Pacific. With markets rebounding since last week, fundamentally sound growth stocks are expected to rally in the near term.
