Bank of America lists some European stocks that are poised to do well in three economic phases. Investment banks screen stocks based on their ability to withstand economic slowdowns, recessions and boom swings. “Our style cycle model … is still in the ‘slowdown’ phase, but is close to crossing the lines for the next phase,” Bank of America quantitative strategist Paulina Strzelinska wrote in a note to clients on May 17. “Historically, ‘recession’ phases have been the typical successors of ‘slowdown’ phases, but ‘boom’ phases have also followed ‘slowdown’.” A slowdown is when economic growth slows down without stopping. In this case, BofA screened for “high quality, (large) size, growth over value, upside momentum and low risk” stocks. The bank described the recession as two consecutive quarters of negative growth leading to job losses and lower consumer spending. For this situation, Bank of America looks for stocks that it defines as high-quality, large-scale, value-over-growth, and low-risk. Prosperity, on the other hand, refers to rapid economic expansion with increased production, employment opportunities, and overall wealth. For this possibility, the Wall Street bank identifies stocks that it believes are worth more than growth, upside momentum, high risk, small cap, and low quality. The table below shows stocks ranked in these situations: The list includes Infineon Technologies, STMicroelectronics, SSE, Swatch Group, Dassault Aviation, HSBC Holdings, Coca-Cola HBC and Siemens, among others. According to Bank of America, these companies are trading at a 28% discount to their average price over the past decade, the largest discount since 2020. Strategists at the bank said the bank’s European composite macro indicator index still showed signs of decline. Slowing but approaching the point of possible recession or boom, which will affect the performance of these selected stocks. “Changes in European bond yields have been the main driver of moving out of the ‘slowdown’ phase into the next in 7 out of 11 historical events,” Strzelinska said. However, some sectors, such as industrials and consumer discretionary, have seen improvements due to increased demand and easing of supply chain bottlenecks as China reopens its economy, the bank said.