Oh Deere!
Hi James John Deere (DE) had a large drop on high volume in the US last night. Would you see this as a good opportunity to add if you were underweight this stock? Many thanks
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Answer
Hi Alex,
Deere has now corrected ~34% from its April high with recession fears accelerating the move over the last few weeks. We like this agricultural machinery business but like many companies it will suffer if we enter a painful recession courtesy of central banks tightening interest rates.
Following a strong move on Friday we believe a 20% bounce is underway but as to whether it’s a great medium / long term buy will depend on whether Jerome Powell et al can successfully navigate the current rate hiking cycle without inducing a “very possible” recession.
