We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
U.S. stocks ended higher on Jun 13 as investors were hopeful that the Fed might finally put a pause on hiking interest rates after fresh data showed that inflation slowed in May. Higher interest rates have been crippling industries as demand for goods and services has been slowing.
A pause in interest rate hikes will certainly be cheered by market participants, but it needs to be noted that the crisis is far from over. Inflation is still at multi-year highs and a lot higher than the Fed’s target rate. This has seen markets remain volatile lately, with consumers adopting a cautious approach to their spending habits. In light of this situation, it would be wise for them to consider investing in stocks that offer assured risk-adjusted returns.
Inflation Still High
The Labor Department reported on Jun 13 that Consumer Price Index (CPI) for May rose just 0.1% after increasing 0.4% in April. Core CPI remained unchanged at 0.4%. On a year-over-year basis, CPI declined to 4% in May from 4.9% in the prior month.
The reading also came in lower than expectations of 4.1% rise in CPI.
Following the release of the data, stocks rallied, with the Dow and the Nasdaq closing 0.8% and 0.4% higher, respectively. The S&P 500 ended the day 0.7% higher.
Understandably, signs of slowing inflation have once again raised hopes among investors that the Fed might finally take a call on pausing interest rate hikes in its upcoming June policy meeting after having hiked rates for 10 times over the past year.
A pause in the interest rate hikes will definitely be cheered by the market participants as that will also halt the steady escalation in borrowing costs that have been affecting key sectors like manufacturing, construction and retail.
Manufacturing activity, which accounts for 11.3% of the economy, has been shrinking over the past year. Retail sales have also been slowing at a steady pace and the homebuilding industry has been left battered owing to higher mortgage rates.
Needless to say, the crisis is far from over. Although prices have been cooling lately, the inflation graph has time and again moved northward, reigniting fears that the Fed could continue with its aggressive rate hike stance.
Moreover, the labor market is still resilient, with solid job additions every month. The Bureau of Labor Statistics reported that nonfarm payrolls increased by 339,000 in May, surpassing expectations of 190,000. Although the unemployment rate rose to 3.7% in May, the Labor Force Participation rate remained unchanged at 62.6%.
Slowing inflation is a positive sign but the market continues to be volatile.
Given this situation, it would be wise to consider investing in defensive sector equities, particularly those in consumer staples and utilities. The consumer staples sector is known for its fundamental strength and maturity, as demand for essential goods tends to remain relatively stable regardless of economic fluctuations. This sector comprises companies that sell everyday commodities, making it inherently defensive.
One of the key characteristics of the consumer staples sector is its stability and the transparency of its profitability and cash flow. By adding stocks from the consumer staples basket to a portfolio, it becomes more resilient in a volatile market.
Therefore, it is recommended to focus on consumer staples and utilities when seeking more stable investment options during uncertain market conditions.
Our Choices
These stocks, or, to put it another way, their businesses are non-cyclical, which shields them from the vagaries of the market. They also pay dividends, which indicates high-quality business that helps them withstand market volatility.
Krispy Kreme, Inc. (DNUT - Free Report) , together with its subsidiaries, operates as a branded retailer and wholesaler of doughnuts, coffee and other complementary beverages, and treats and packaged sweets. DNUT’s operating segments include Company Stores, Domestic Franchise, International Franchise, and KK Supply Chain.
Krispy Kreme’sexpected earnings growth rate for the current year is 17.2%. The Zacks Consensus Estimate for its current-year earnings has improved 3% over the past 60 days. DNUT has a dividend yield of 0.94%. Krispy Kreme currentlyhas a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Conagra Brands, Inc. (CAG - Free Report) is one of the leading branded food companies in North America. CAG offers premium edible products with a refined focus on innovation. Conagra Brands maintains a highly dynamic product portfolio and incorporates alterations within it as per the preference pattern of the end-users.
Conagra Brands’ expected earnings growth rate for the current year is 17%. The Zacks Consensus Estimate for its current-year earnings has improved 0.4% over the past 60 days. CAG has a dividend yield of 3.85%. Conagra Brands has a Zacks Rank #2 at present.
Lamb Weston Holdings, Inc. (LW - Free Report) is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and provides a range of appetizers. LW, along with its joint venture allies, is the top frozen potato products supplier in North America, while it also operates internationally, with a robust and growing presence in emerging markets.
Lamb Weston’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for the current-year earnings has improved 2.7% over the past 60 days. LW has a dividend yield of 0.99%. Lamb Weston currently carries a Zacks Rank #2.
Ingredion Incorporated (INGR - Free Report) is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.
Ingredion’s expected earnings growth rate for the current year is 22.2%. The Zacks Consensus Estimate for the current-year earnings has improved 9.4% over the past 60 days. INGR has a dividend yield of 2.65%. Ingredion currently carries a Zacks Rank #2.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
4 Stocks to Buy Amid Continued Making Volatility
U.S. stocks ended higher on Jun 13 as investors were hopeful that the Fed might finally put a pause on hiking interest rates after fresh data showed that inflation slowed in May. Higher interest rates have been crippling industries as demand for goods and services has been slowing.
A pause in interest rate hikes will certainly be cheered by market participants, but it needs to be noted that the crisis is far from over. Inflation is still at multi-year highs and a lot higher than the Fed’s target rate. This has seen markets remain volatile lately, with consumers adopting a cautious approach to their spending habits. In light of this situation, it would be wise for them to consider investing in stocks that offer assured risk-adjusted returns.
Inflation Still High
The Labor Department reported on Jun 13 that Consumer Price Index (CPI) for May rose just 0.1% after increasing 0.4% in April. Core CPI remained unchanged at 0.4%. On a year-over-year basis, CPI declined to 4% in May from 4.9% in the prior month.
The reading also came in lower than expectations of 4.1% rise in CPI.
Following the release of the data, stocks rallied, with the Dow and the Nasdaq closing 0.8% and 0.4% higher, respectively. The S&P 500 ended the day 0.7% higher.
Understandably, signs of slowing inflation have once again raised hopes among investors that the Fed might finally take a call on pausing interest rate hikes in its upcoming June policy meeting after having hiked rates for 10 times over the past year.
A pause in the interest rate hikes will definitely be cheered by the market participants as that will also halt the steady escalation in borrowing costs that have been affecting key sectors like manufacturing, construction and retail.
Manufacturing activity, which accounts for 11.3% of the economy, has been shrinking over the past year. Retail sales have also been slowing at a steady pace and the homebuilding industry has been left battered owing to higher mortgage rates.
Needless to say, the crisis is far from over. Although prices have been cooling lately, the inflation graph has time and again moved northward, reigniting fears that the Fed could continue with its aggressive rate hike stance.
Moreover, the labor market is still resilient, with solid job additions every month. The Bureau of Labor Statistics reported that nonfarm payrolls increased by 339,000 in May, surpassing expectations of 190,000. Although the unemployment rate rose to 3.7% in May, the Labor Force Participation rate remained unchanged at 62.6%.
Slowing inflation is a positive sign but the market continues to be volatile.
Given this situation, it would be wise to consider investing in defensive sector equities, particularly those in consumer staples and utilities. The consumer staples sector is known for its fundamental strength and maturity, as demand for essential goods tends to remain relatively stable regardless of economic fluctuations. This sector comprises companies that sell everyday commodities, making it inherently defensive.
One of the key characteristics of the consumer staples sector is its stability and the transparency of its profitability and cash flow. By adding stocks from the consumer staples basket to a portfolio, it becomes more resilient in a volatile market.
Therefore, it is recommended to focus on consumer staples and utilities when seeking more stable investment options during uncertain market conditions.
Our Choices
These stocks, or, to put it another way, their businesses are non-cyclical, which shields them from the vagaries of the market. They also pay dividends, which indicates high-quality business that helps them withstand market volatility.
Krispy Kreme, Inc. (DNUT - Free Report) , together with its subsidiaries, operates as a branded retailer and wholesaler of doughnuts, coffee and other complementary beverages, and treats and packaged sweets. DNUT’s operating segments include Company Stores, Domestic Franchise, International Franchise, and KK Supply Chain.
Krispy Kreme’sexpected earnings growth rate for the current year is 17.2%. The Zacks Consensus Estimate for its current-year earnings has improved 3% over the past 60 days. DNUT has a dividend yield of 0.94%. Krispy Kreme currentlyhas a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Conagra Brands, Inc. (CAG - Free Report) is one of the leading branded food companies in North America. CAG offers premium edible products with a refined focus on innovation. Conagra Brands maintains a highly dynamic product portfolio and incorporates alterations within it as per the preference pattern of the end-users.
Conagra Brands’ expected earnings growth rate for the current year is 17%. The Zacks Consensus Estimate for its current-year earnings has improved 0.4% over the past 60 days. CAG has a dividend yield of 3.85%. Conagra Brands has a Zacks Rank #2 at present.
Lamb Weston Holdings, Inc. (LW - Free Report) is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and provides a range of appetizers. LW, along with its joint venture allies, is the top frozen potato products supplier in North America, while it also operates internationally, with a robust and growing presence in emerging markets.
Lamb Weston’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for the current-year earnings has improved 2.7% over the past 60 days. LW has a dividend yield of 0.99%. Lamb Weston currently carries a Zacks Rank #2.
Ingredion Incorporated (INGR - Free Report) is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.
Ingredion’s expected earnings growth rate for the current year is 22.2%. The Zacks Consensus Estimate for the current-year earnings has improved 9.4% over the past 60 days. INGR has a dividend yield of 2.65%. Ingredion currently carries a Zacks Rank #2.