As the first quarter comes to an end, the bond market is calling for a recession for the first time in more than a decade, leaving investors scrambling to figure out what to buy and sell. If history is any guide, there's a pattern in the stock market to follow.
Now, which stocks would work the next quarter and beyond if this red flag from the bond market turns out to be right and the economy is in trouble? The S&P 500 utilities sector has posted a nearly 10 percent gain on average six months after the yield curve went upside down, while the S&P 500 consumer staple sector scored a 8 percent return, Kensho data show. The S&P 500 on average has lost 0.19 percent six months after an inversion.
"At an individual stock level, nearly every food, beverage, and home & personal care in our study outperformed on average during periods of declining Treasury yields," Rupesh Parikh, senior equity analyst at Oppenheimer, said in a note on Thursday.
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