Chemical/diversified industry

Diversified chemical industry stocks, despite gains in European companies, should be purchased carefully. The diversified chemicals industry tends to trail economic cycles, slowing down well into recessions and picking up well after recoveries. It can expect continually lagging profits, as the European economies continue to struggle and the US economy just begins to recover. European chemicals issues recently jumped in price, as speculators anticipated a dramatic 1994 European recovery, but there is some question as to how accurately this buying anticipates economic trends.