Recent inflation reports have sent shockwaves through the investment community, triggering a sell-off that has left many scrambling for stability. The release of producer and consumer price indexes this week revealed that annualized inflation still sits above 2%, a concerning indicator for investors eagerly anticipating a potential decline in interest rates by the Federal Reserve. With fed funds futures pricing data now suggesting that a rate cut may be delayed until September, the uncertainty surrounding the market has led to a 1% decline in the S & P 500 since the beginning of April.
In times of market turmoil, investors often turn to defensive stocks to weather the storm. These stocks typically exhibit lower volatility, consistent income growth, healthy gross margins, and potential upside compared to market averages. CNBC Pro’s screener tool identified four S & P 500 stocks that meet all of these criteria, offering a potential refuge for investors seeking stability amidst market fluctuations.
Among the select few defensive stocks identified, ServiceNow and Roper Technologies stand out as promising options for investors. Despite an overall lackluster performance in the tech sector this year, ServiceNow has remained resilient, with analysts predicting double-digit growth in the near future. Roper Technologies, on the other hand, has faced challenges in 2024 but analysts anticipate a turnaround, citing a strong buy rating and potential price rally ahead.
Outside of the technology sector, TJX and Coterra Energy offer alternative defensive stock options for investors. While TJX has underperformed the market this year, analysts foresee significant upside potential in the coming months. Similarly, Coterra Energy, a player in the natural gas exploration and production space, has garnered positive attention from analysts, with a strong buy rating and anticipated growth in both stock price and dividend yield.
One notable recommendation comes from UBS’s Josh Silverstein, who has expressed bullish sentiments towards Coterra Energy. Silverstein highlights the company’s growing oil exposure, robust balance sheet, and attractive shareholder return profile as key factors driving his positive outlook on the stock. Amidst market turbulence, expert insights like Silverstein’s can provide valuable guidance for investors navigating uncertain terrain.