‘Defensive’ stocks/sectors – shares in companies that tend to be more immune to economic downturns. This could for example include consumer staples, healthcare or utility companies.
Hard/soft landing – A ‘hard’ landing refers to a period of economic slowdown caused by central bank tightening that triggers a recession. In a ‘soft landing' despite tightening, recession is either mild or avoided.
Headwinds/tailwinds – headwinds are factors likely to negatively affect a company, tailwinds on the other hand are likely to have a positive impact.
Net interest margins – a measure of profitability for financial institutions. It is the difference between the interest income they generate from borrowers and the amount of interest they pay out to lenders.
Operating margins – operating profit is a company’s earnings before interest and tax, calculated by subtracting operating costs from revenue. Operating margin is calculated by dividing operating profit
by revenue.
Price/earnings ratio – a ratio derived by dividing a company’s share price by its earnings per share. It is a relative valuation measure to determine if a company’s share price could be over or undervalued relative to its earnings.
‘Sticky’ inflation – Persistently elevated levels of inflation within an economy, typically associated with core measures where prices do not adjust as quickly to supply and demand changes.
