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Consumer confidence fell 6.7% to 81.9 in September, its lowest level since April 2014.
BHC, CDNA, DOLE and CHEF offer defensive exposure across healthcare and consumer staples.
Expected earnings growth ranges from 11.7% for DOLE to more than 100% for CDNA.
Consumer confidence fell to a 12-and-a-half-year low in September as households remain concerned about labor market conditions and the Middle East crisis could continue for a longer period, which could see inflation rise further.
Surging oil prices have already seen inflation climb, compelling the Federal Reserve to hike interest rates this month. Fears of more rate hikes have also already gripped markets.
Given this situation, it would be ideal to invest in defensive stocks from the healthcare and consumer staples sectors, namely, Bausch Health Companies Inc. (BHC - Free Report) , CareDx, Inc. (CDNA - Free Report) , Dole plc (DOLE - Free Report) and The Chefs' Warehouse, Inc. (CHEF - Free Report) .
Consumer Confidence Plummets
The Consumer Confidence index dropped 6.7% to 81.9 in September to hit its lowest level since April 2014, the Conference Board said on Tuesday. This was also sharply lower than the analysts’ expectations of the index at 89.2.
The survey showed that consumer confidence declined across all age and income groups, as well as political party affiliations. Consumers have been growing increasingly concerned about rising inflation and the economy’s health.
Households believe business and labor market conditions will deteriorate further over the next six months, amid the ongoing tensions between the United States and Iran and higher interest rates.
The percentage of respondents who considered jobs "plentiful" fell to 23.6% in September from 24.5% in the prior month, marking the lowest level since February 2021.
The consumer confidence report comes just days after the University of Michigan reported that its Consumer Sentiment Index dropped to a final reading of 48.1 in September from 51.7 in August, to hit a four-month low.
Oil prices have surged since the U.S.-Iran war began in late February, pushing inflation up. The Federal Reserve hiked interest rates by 25 basis points this month, for the first time in more than three years.
The Federal Reserve also hinted at another interest rate hike this year, which has now been worrying consumers, as higher borrowing rates will weaken their purchasing power.
4 Defensive Stocks With Upside
Bausch Health Companies
Bausch Health Companies Inc. is a global, diversified specialty pharmaceutical and medical device company focused on developing, manufacturing and marketing products across key therapeutic areas such as gastroenterology, hepatology, neurology and dermatology. BHC’s portfolio includes branded and generic drugs, branded generics, over-the-counter products and aesthetic medical devices.
Bausch Health Companies has an expected earnings growth rate of 16.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.4% over the past 60 days. BHC currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CareDx
CareDx, Inc. develops, markets and delivers a diagnostic surveillance solution for heart transplant recipients. CDNA provides AlloMap, a noninvasive blood test used in the identification of heart transplant recipients. It is also pursuing other areas of transplant surveillance, such as the use of cell-free DNA as a biomarker for rejection.
CareDx’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 35.2% over the past 60 days. Currently, CDNA has a Zacks Rank #1.
Dole plc
Dole plc is a producer of fresh bananas and pineapples. DOLE will also have a growing presence in categories such as berries, avocados and organic produce.
Dole’s expected earnings growth rate for the current year is 11.7%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days. Dole plc has a beta of 0.61 and a current dividend yield of 2.62%. DOLE currently carries a Zacks Rank #2 (Buy).
The Chefs' Warehouse
The Chefs' Warehouse, Inc. is a distributor of specialty food products in the United States. CHEF is focused on serving the specific needs of chefs who own and operate restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools and specialty food stores.
CHEF’s Warehouse’sexpected earnings growth rate for the current year is 33.7%. The Zacks Consensus Estimate for current-year earnings has improved 8.1% over the past 60 days. CHEF has a Zacks Rank #1.
View the Zacks #1 Rank List
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Consumer Confidence Falls Amid Ongoing Geopolitical Tensions: 4 Picks
Key Takeaways
Consumer confidence fell to a 12-and-a-half-year low in September as households remain concerned about labor market conditions and the Middle East crisis could continue for a longer period, which could see inflation rise further.
Surging oil prices have already seen inflation climb, compelling the Federal Reserve to hike interest rates this month. Fears of more rate hikes have also already gripped markets.
Given this situation, it would be ideal to invest in defensive stocks from the healthcare and consumer staples sectors, namely, Bausch Health Companies Inc. (BHC - Free Report) , CareDx, Inc. (CDNA - Free Report) , Dole plc (DOLE - Free Report) and The Chefs' Warehouse, Inc. (CHEF - Free Report) .
Consumer Confidence Plummets
The Consumer Confidence index dropped 6.7% to 81.9 in September to hit its lowest level since April 2014, the Conference Board said on Tuesday. This was also sharply lower than the analysts’ expectations of the index at 89.2.
The survey showed that consumer confidence declined across all age and income groups, as well as political party affiliations. Consumers have been growing increasingly concerned about rising inflation and the economy’s health.
Households believe business and labor market conditions will deteriorate further over the next six months, amid the ongoing tensions between the United States and Iran and higher interest rates.
The percentage of respondents who considered jobs "plentiful" fell to 23.6% in September from 24.5% in the prior month, marking the lowest level since February 2021.
The consumer confidence report comes just days after the University of Michigan reported that its Consumer Sentiment Index dropped to a final reading of 48.1 in September from 51.7 in August, to hit a four-month low.
Oil prices have surged since the U.S.-Iran war began in late February, pushing inflation up. The Federal Reserve hiked interest rates by 25 basis points this month, for the first time in more than three years.
The Federal Reserve also hinted at another interest rate hike this year, which has now been worrying consumers, as higher borrowing rates will weaken their purchasing power.
4 Defensive Stocks With Upside
Bausch Health Companies
Bausch Health Companies Inc. is a global, diversified specialty pharmaceutical and medical device company focused on developing, manufacturing and marketing products across key therapeutic areas such as gastroenterology, hepatology, neurology and dermatology. BHC’s portfolio includes branded and generic drugs, branded generics, over-the-counter products and aesthetic medical devices.
Bausch Health Companies has an expected earnings growth rate of 16.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.4% over the past 60 days. BHC currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CareDx
CareDx, Inc. develops, markets and delivers a diagnostic surveillance solution for heart transplant recipients. CDNA provides AlloMap, a noninvasive blood test used in the identification of heart transplant recipients. It is also pursuing other areas of transplant surveillance, such as the use of cell-free DNA as a biomarker for rejection.
CareDx’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 35.2% over the past 60 days. Currently, CDNA has a Zacks Rank #1.
Dole plc
Dole plc is a producer of fresh bananas and pineapples. DOLE will also have a growing presence in categories such as berries, avocados and organic produce.
Dole’s expected earnings growth rate for the current year is 11.7%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days. Dole plc has a beta of 0.61 and a current dividend yield of 2.62%. DOLE currently carries a Zacks Rank #2 (Buy).
The Chefs' Warehouse
The Chefs' Warehouse, Inc. is a distributor of specialty food products in the United States. CHEF is focused on serving the specific needs of chefs who own and operate restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools and specialty food stores.
CHEF’s Warehouse’sexpected earnings growth rate for the current year is 33.7%. The Zacks Consensus Estimate for current-year earnings has improved 8.1% over the past 60 days. CHEF has a Zacks Rank #1.