6 Consumer Staple Stocks To Withstand Virus-Induced Disturbances
Zacks Investment Research | Mar 17, 2020 08:17AM ET
Wall Street continues to grapple with severe market volatility as the coronavirus pandemic is showing no signs of slowing down. Market participants have been left in the lurch with day-to-day fluctuations ranging from 5-7%.
However, a few consumer staple stocks with a favorable Zacks Rank have witnessed upward estimate revisions for 2020 earnings per share (EPS) during the past 30 days amid the coronavirus pandemic, which has been wreaking havoc on the global stock markets.
Notably, market mayhem and possibility of a near-term recession as warned by several economists and financial experts have also failed to deter these stocks. Investors can take a look at these stocks as these are likely to cushion their portfolio against market uncertainty.
Wall Street Witness Historic Rout
On Mar 16, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — plummeted 12.9%, 12% and 12.3%, respectively. Notably, during the intraday session, a first-level circuit breaker is triggered when the S&P 500 drops by 7% resulting in a 15-minute pause in trading. Another halt happens when the benchmark index tumbles 13% on the day.
After Monday’s losses, the Dow is currently 31.7% below its all-time high. Meanwhile, the S&P 500 and the Nasdaq Composite are more than 29% below their all-time highs recorded last month. Notably, the Dow fell to its lowest point since 2017. Year to date, these indexes have lost 29.3%, 26.1% and 23.1%, respectively.
The COBE VIX — popularly known as the best fear gauge of Wall Street — surged 43% to record a new all-time high of 82.69, surpassing its previous peak level of 80.74 posted on Nov 21, 2008.
Why Consumer Staple Stocks
The consumer staples sector includes companies that provide necessities and products for daily use. This makes the sector defensive in nature. Thereore, this has always been a go-to place for investors, who want to play it safe during extreme market fluctuations. Adding stocks from the consumer staples basket lends more stability to portfolios in an uncertain market condition.
The stock market mayhem is likely to continue in the near term as the coronavirus is still spreading globally. This caused a significant disruption in global economic activities resulting in a global recession threat. At this critical stage, investment in consumer staple stocks will be prudent.
Get The News You Want
Our Top Picks
We have narrowed down our search to six consumer staple stocks that have witnessed strong EPS estimate revisions in the past month. Notably, the past month was the period when Wall Street witnessed one of the worst financial disasters in its history. Moreover, the stocks have solid growth potential and a Zacks Rank #2 (Buy). You can see Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.