The economy is about to slow down. That's the time for retail stocks, says Goldman Sachs.

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Investors should lean toward retailers as economic times get tougher, and away from autos, says Goldman Sachs.

Stocks are bracing for more losses after Fed Chairman Jerome Powell promised to proceed “carefully,” but with at least one more hike. That’s as he sees consumers hanging in there despite higher energy prices and student loan payments coming due.

“Retail has historically outperformed autos during all phases of the business cycle, except when the economy is reaching peak expansion,” says Kostin and the team. The Goldman team expects that the resumption of student-loan payments will create a significant drag among middle-income consumers, “which should create a larger headwind for autos than retails.”

The buzz FedEx shares FDX, +0.21% are up 5% after the package deliverer lifted its full-year profit outlook. Hollywood writers and studios are reportedly near a deal to end a monthslong strike that has ground TV and movie production to a halt.

 

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