Don't look to these companies for recession protection
It’s easy to predict that a recession will come eventually.
They always do. The trick is in the when – and even the most
experienced experts take a lot of swings without making contact.
But more strategists and economists are increasing their
odds of a forthcoming recession. An August survey by the National Association
for Business Economics showed that three of four economists expect a recession
by 2021. It could come sooner than that. Also in August, Bank of America
analysts said there’s a greater-than-30% chance of a recession within 12
months. In a June interview, economist Gary Shilling said, “I think we’re
probably already in a recession.”
There are plenty of potential catalysts. Numerous
international central banks are easing their policies to battle slowing
economic growth. America’s Federal Reserve is no exception – it just announced
the second cut in its benchmark interest rate this year. The U.S.-China trade
war is exacerbating things, with a salvo of tariffs weighing on consumers here
and abroad. This has been reflected in the Treasury yield curve, which has
inverted several times in 2019 – a recessionary warning sign.
Don’t look to these five stocks for recession protection.
Many businesses surely will feel the pinch of an economic pullback. But these
five better-known names – while fine companies in some respects – have issues
such as high debt levels and struggling growth despite the economic expansion that
might make a downturn more painful for them than others.
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