There’s plenty of talk around about the dreaded ‘R’ word, recession, as the markets are obviously cooling off following the prolonged bull runs of late 2020 and 2021. With inflation running at 40-year highs, and GDP growth slipping in Q1, it’s no wonder that people are talking about a return to the late ‘70s, and Carter-era economic malaise.
But have we taken the pessimism too far? Covering the market situation for Wells Fargo, senior equity analyst Chris Harvey believes so. He sums up the forecast with a less grim view, in fact, with guarded optimism: “Despite daily calls for recession from anyone with a megaphone, we do not expect one over next 12 months. Rather, stagflation (high inflation/slower growth) likely will prevail, arguing for stable growers and low-vol stocks.”
Harvey backs up that view with some specific data citations that should encourage investors, saying, “We do not expect the consumer to wilt given that jobless claims are at lows not seen since 1968 and US household net worth as of 12/31/21 was at an all-time high of $150T (10yr CAGR: 8.4%). This suggests recession risk is more fear than fact…”
Still, we can’t discount continued inflation and equity volatility, nor can we fully discount recessionary possibilities; in all of those chances, a strong defensive stance, including high-yield dividend payers, will offer investors much-needed portfolio protection.
Against this backdrop, Wells Fargo analyst Finian O’Shea has given the thumbs-up to two dividend stocks yielding 8% or better. Opening up the TipRanks database, we examined the details behind these two to find out what else makes them compelling buys. more on yahoo finance
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