Published on 22 Jun 2022 on Insider Monkey via Yahoo Finance
10 Best Recession Stocks to Buy According to Wells Fargo
In this article, we will look at 10 best recession stocks to buy according to Wells Fargo. If you want to explore similar stocks, you can also take a look at 5 Best Recession Stocks to Buy According to Wells Fargo.
This June Wells Fargo unveiled its "Recession Stock Portfolio" right before the Fed issued its latest rate hike on June 16. The central bank hiked interest rates by another 75 basis points bringing its benchmark fund's rate to a range between 1.5% and 1.75%, the highest it has been since 1994. Wells Fargo highlighted that according to the central bank's data, at the end of 2021 roughly 24.3% of U.S. household assets were in equities. Wells Fargo estimates U.S. household assets to decline by $6 trillion in the second quarter of 2022, due to sell-offs. Chris Harvey, a senior analyst at Wells Fargo, said that once the economy is in a recession, the Fed is likely to ease its tight monetary policies. Harvey added:
"We are not looking for a level, but rather an event (or events) to stabilize equities. Stocks likely will find a bottom when the market believes Fed hikes will begin to decelerate. To get there, we will need to see jobless claims numbers continue to rise, suggesting supply/demand is better aligning and breakevens continue to decline (implying inflation expectations are abating). We believe this is still off in the distance."