Recession fears and the stock market --- is it too late to play defense?

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While only time will tell whether a recession is in the offing, stock-market sectors that perform best when economic uncertainty is on the rise have already significantly outperformed the broader market.

Recession fears are on the rise as the Federal Reserve gears up to fight inflation. Many stock-market investors are already playing defense and may wonder if those strategies have more room to run.

Fed playing catchup The Federal Reserve is seen belatedly scrambling to tighten monetary policy at a breakneck pace — including the potential for multiple, outsize half-percentage point increases in interest rates. It’s also contemplating a much faster wind down of its balance sheet than in 2017-2019.

Read: U.S. recession indicator is `not flashing code red’ yet, says pioneering yield-curve researcher Need to Know: Default risk, commodity shocks and other things investors need to remember as Ukraine war enters new phase “During periods of macro uncertainty, some companies/industries outperform simply because they have less risky businesses than the average S&P company,” said Nicholas Colas, co-founder of DataTrek Research, in an April 14 note. U.S. large-cap utilities, consumer staples, and health care — often described as the primary defensive sectors — are all outperforming the S&P 500 SPX, -1.21% this year and over the last 12 months.

 

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I hope you're joking. A recession is imminent. There is zero question about it.

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Investors rush toward stocks geared to a recession as market remains stuck in 9-month rangeThe S&P 500 has spent just about all of the past three months below the minus-5% threshold and finished last week at a level first reached nearly nine months ago. Recession with crash the economy for 10/15 years. I think most people are looking at whether or not to get out of stocks for a while right now and own some real tangible things instead. Same thinking goes for cryptocurrency Gold
Source: CNBC - 🏆 12. / 72 Read more »