20 Stocks Experts Say Will Help Investors Beat A Bear Market
Share this @internewscast.com


Topline

With stocks on track for one of their worst years in recent history amid concerns around persistent inflation, rate hikes from the Federal Reserve and rising recession risks, top firms on Wall Street say investors should turn to defensive stocks with stable margins and cash flow that should be able to weather a bear market.

Key Facts

Analysts at Evercore ISI on Thursday argued that several bank stocks are set to benefit from rising rates, after Fed officials indicated that they are prepared to continue aggressively hiking interest rates to combat inflation, according to minutes from the central bank’s latest policy meeting.

The firm’s top picks include Wells Fargo, First Republic Bank, Comerica and KeyCorp, all of which have more upside potential as rates rise, with balance sheet growth from loans and deposits while also having “less downside credit risk than peers if economic trends weaken.”

Jefferies analysts say that investors hoping to bet on the “resilient” American consumer should look no further than casual dining stocks, which are well positioned to capitalize on the recent shift in consumer spending from goods to services.

While the inflationary outlook remains worrisome, restaurant chains won’t see sales take too much of a hit and should still benefit from solid consumer spending, the firm says, pointing to the likes of Dave & Buster’s, Outback Steakhouse owner Bloomin’ Brands and the Cheesecake Factory as prime examples.

Earlier this week, Morgan Stanley chief U.S. equity strategist Mike Wilson predicted a further market selloff due to rising recession risks, though he did identify several “high-quality companies that can potentially weather this bear market,” particularly those with strong free cash flow.

He lists five defensive stock picks in the healthcare and consumer sectors which should achieve “growth at a reasonable price,” including Exxon Mobil, Coca-Cola, Deere & Co, Abbott Laboratories and CVS Health.

What To Watch For:

Strategists at UBS warned that stagflation—high inflation and slowing economic growth—is likely to persist, especially as markets have not yet priced this in. The bank recommends investors look at stocks with steady margins to weather stagflation—including consumer stocks such as Costco, Kroger, eBay and Procter & Gamble as well as Microsoft, Johnson & Johnson, Pfizer, Abbott Laboratories, Chevron and Exxon Mobil.

Key Background:

Inflationary pressures and the prospect of rising rates have led to rising recession fears which have weighed on investor sentiment. Stocks have posted seven weeks in a row of losses, with the S&P 500 briefly plunging into bear market territory last Friday and currently sits over 15% below its record highs in January. The latest Fed minutes released Wednesday show that there is a growing consensus about the growing need for tighter monetary policy, with most central bank officials agreeing that it would be necessary to raise interest rates by 0.50% intervals at the upcoming meetings in June and July.

Further Reading:

Here’s How Long It Takes For Stocks To Recover From Bear Markets (Forbes)

Retail Stocks Rebound But ‘Feast-Or-Famine Environment’ May Persist Amid Shift In Consumer Spending, Experts Warn (Forbes)

Stocks Rally After Fed Minutes Show Central Bank Will Continue To Raise Rates Aggressively (Forbes)

Warren Buffett’s $51 Billion Stock Market Shopping Spree: Here’s What He’s Buying (Forbes)

Share this @internewscast.com
You May Also Like

European Travel Just Got Harder After SAS Pilots Strike

LONDON—Pilots at Scandinavia’s main airline walked out, starting a strike that the…

‘Stranger Things:’ How Vecna Changed The Lore Of The Upside Down

Vecna, the big bad of Stranger Things. Netflix Season 4 of Netflix’s…

Brittney Griner Sends Handwritten Plea To Biden, Agent Says

Topline WNBA star Brittney Griner sent President Joe Biden a handwritten letter…

Another Sports Network, Olympic Channel, Shutting Down

Photo by Lintao Zhang/Getty Images. Getty Images It was no surprise when…

Will The Stock Market Be A Good Predictor Of A US Recession?

New York Stock Exchange, Manhattan, Financial District, Wall Street getty The Federal…

Are expiring copyrights the next goldmine for NFTs?

Although non-fungible tokens (NFTs) are most commonly known in the form of…

Ethereum average gas fee falls down to $1.57, the lowest since 2020

The Ethereum (ETH) ecosystem’s biggest roadblock to mainstream dominance is often attributed…

How U.S. Investors Can Deal With Fallout From The War In Ukraine In These Unprecedented Times

Russian forces are not letting up in their push to take over…