13 stocks whose built-in advantages protect them from the economic uncertainty that pervades the market

Stock Market


Investors who were unsure about the Fed’s merciless inflation policy have probably now gotten the message.

And as markets adjust to the prospect of more hikes from a central bank that plans to “keep going until it’s done,” with threats of an escalating war in Europe and energy crisis hovering in the background, the S&P 500 SPX,
-1.71%
may struggle to revisit the summer nadir.

“Given today’s [Wednesday’s] downward reversal and a continued lack of any capitulating signals, we think the path to the June lows (3,640) could be faster than many expect,” Jonathan Krinsky, chief market technician at BTIG, told clients, though he ‘ a little hope hangs.

“The bad news is we’re still in one of the worst seasonal windows of the year, especially in a mid-term year. The good news is that it turns around quickly by mid-October. We think we test or break the June lows before then, which should create a better entry point for a year-end rally,” Krinsky said.

Investors would be forgiven for feeling like they’re cornered when it comes to investment options right now. This brings us to us call of the day of Credit Suisse, which provides a “protective moat for uncertain times” via dozens of companies with solid business models.

Note that the bank currently recommends an underweight stance on stocks due to “potential downside risk to 2023 earnings estimates of 15% to 20% for the S&P 500.” They see a “highly uncertain” growth outlook caused by aggressive central bank responses to tough wage growth and Europe’s energy crisis. Strategists expect US growth to reach just 0.9% in 2023, with a contraction of 0.2% in the eurozone.

Still, Richard Kersley, head of global equity research, and his team of analysts asked across multiple regions to “identify companies whose earnings may not be immune to but should be better protected against economic uncertainty thanks to the high barriers to entry that their businesses face.” surround. “

“Stocks selected reflect examples of companies that have demonstrated a superior ability to innovate, their first mover advantage or simply an advantage of scale that has developed a market leadership position and with it stronger pricing power,” he said.

And rather than limiting choices to defensive sectors or styles, they cast a wide net and come up with 35 better-than-rated stocks with an “economic moat across regions.” Bold names represent those with above-consensus earnings estimates and target prices, as well as the most anti-consensus calls.

Americas: Air products
APD,
-1.40%,
Autodesk
ADSC,
-1.31%,
McDonald’s
MCD,
-1.69%,
Microsoft MSFT,
-1.44%,
Next Era
NO,
-2.01%,
ppl ppl,
-1.63%,
Reynolds Reynolds,
+0.66%,
Hershey
HSY,
+0.42%,
Thomson Reuters TRI,
-1.13%,
Union Pacific
UNP,
-0.65%,
Visa V,
-2.63%.

EMEA: Liquid air
AI,
-1.17%,
ASML ASML,
-1.52%

ASML,
-2.22%,
Assa Abloy ASSA.B,
-1.42%,
Coloplast
COLO.B,
-1.42%,
Diageo
DGE,
+0.74%

DEO,
+0.09%,
Edenred EDEN,
-0.72%,
Experian EXPN,
-1.01%,
Haleon
HLN,
-0.71%,
Legal and General LGEN,
-0.15%,
LSEG LSEG,
-1.22%,
National timetable
of,
-0.29%,
Reckitt Benckiser
RCT,
-0.64%,
Schneider US,
-0.73%,
Pig PIG,
-1.02%,
Smurfit Kappa SK3,
+0.96%,
Wolters Kluwer
WKL,
-0.74%.

Asia Pacific: AIA 1299,
-2.38%,
CP All PCL CPALL,
-0.43%,
CTOS Digital 5301,
-0.71%,
Hindustan Unilever 500696,
+2.64%,
Intl Container ICT,
,
PT Bank Mandiri (Persero) Tbk, Samsung Biologics 207940,
-0.13%,
Samsung Electronics 005930,
-1.63%

Check out Day Two of MarketWatch’s Best New Ideas in Money festival. It’s not too late to sign up, and here’s an interview you might have missed with legendary investors Ray Dalio and Carl Icahn.

The markets

Stock Futures ES00,
+0.13%

NQ00,
+0.01%

YM00,
+0.22%
is back and forth, but now in the green, with 2-year Treasury yields TMUBMUSD02Y,
4.070%
at its highest since 2008. The dollar index DXY,
+0.06%
hovered at 2002 highs, until the Bank of Japan intervened for the first time in 25 years after leaving key interest rates unchanged. Oil prices CL00,
+2.15%
is higher.

Asian stocks NIK,
-0.58%

HSI,
-1.61%
tripped and the Korean Won USDKRW,
+0.29%
hit its lowest in 13 years. European stocks SXXP,
-0.54%
not doing much better.

The buzzing

Darden Restaurants DRI,
-1.11%
stock falls on a same-store sales miss, with weakness at flagship restaurant chains like Olive Garden.

After last week’s warning and cost-cutting plans FedEx FDX,
-2.64%
will report after the close. Investors won’t know what management has to say about that and a global slowdown.

Talos Energy shares TALO,
-4.16%
climb after it announced a $1.1 billion cash and stock deal to buy privately held EnVen Energy.

The Swiss National Bank matched the Fed’s 75 basis point hike, marking the end of negative interest rates for global central banks. Both Norway’s central bank and the Bank of England rose by 50 basis points.

Weekly jobless claims rose by 5,000 to 213,000, with leading economic indicators still to come.

More than two hundred Ukrainians and foreigners, including soldiers defending a Mariupol steel plant, were freed in exchange for one ally of Russian President Vladimir Putin.

“If you’re the president of the United States, you can declassify just by saying, ‘It’s declassified.’ Even by thinking about it.” That was former President Donald Trump just before a federal court lifted a hold on Mar-a-Lago classified records.

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The chart

Here’s an update to a popular analog chart comparing the S&P 500’s progress in 2022 to what happened in 2008 from blogger The Market Ear. Looks spicy:

The Market Ear/Refinitiv

The tickers

These were the most active stock market ticker symbols as of 6 a.m. Eastern.

Typist

Security name

TSLA,
-2.57%

Tesla

GM,
-2.47%

GameStop

AMC,
-1.26%

AMC Entertainment

AAPL,
-2.03%

appeal

NIO,
-10.34%

NIO

BBBY,
-4.34%

Bed Bath & Beyond

MONKEY,
-5.91%

AMC Entertainment preferred stock

AVCT,
+1.13%

American Virtual Cloud Technologies

AMZN,
-2.99%

Amazon

NVDA,
+0.65%

Nvidia

Random reading

The unborn gives kale a thumbs up.

$625 per head for a dinner – at Disney World DIS,
-2.86%.

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