There’s a good deal of panic out there.
Inflation is out of control. The Federal Reserve hiked interest rates by 0.75%, with a likely need for more. Traders are panicking. Markets are falling. And no one knows what comes next.
While it’s easy to panic, don’t.
Remember, markets are resilient, and have come back from worse. And if you really want to go long stocks, consider recession-resistant stocks, like Procter & Gamble Co. (PG). Oversold on RSI, MACD, and Williams’ %R, it’s one of the only stocks that’s rising today. From a current price of $134.13, we believe it could run back to $145 again, near-term.
With PG, most of its brands are still seeing strong demand, including healthcare, grooming, home care, and care. In fact, no matter how steep of a downturn, consumers still need soap, detergent, toothpaste, toilet paper, food, etc. All of which can help provide a steadier and far more predictable cash flow for companies, like PG. In addition, the company is passing its higher costs on to the consumers to help it weather the storm.
Or, take a look at Dollar General (DG), which is holding up well.
With consumers cutting back on spending, many are turning to dollar stores to save a few dollars. We can see that with the company’s strong outlook. Dollar General expects net sales growth of about 10% for its current fiscal year. It also says EPS could grow 12% to 14%.
Even Dollar Tree (DLTR) is holding up nicely – especially after it beat earnings estimates and raised guidance.
According to Barron’s, the company “posted adjusted earnings of $2.37 per share, beating both analysts’ consensus call for $2.00 per share and the year-earlier result of $1.61. Revenue for the quarter was $6.9 billion, above Wall Street’s expectation for $6.8 billion and the $6.5 billion of revenue the discounter brought in a year earlier. Consolidated net sales for the year are now expected to range from $27.8 billion to $28.1 billion, compared with the range of $27.2 billion to $27.9 billion management predicted earlier.”
Or, take a look at Walmart (WMT).
While the stock recently gapped from $150 to $119.54, it’s also starting to attract attention as a recession resistant trade idea. Again, no matter how steep of a downturn, consumers still need soap, detergent, toothpaste, toilet paper, food, etc. WMT also carries a 1.87% yield.