In early September, stock markets faced instability, prompting concerns about the impact of rising oil prices on inflation. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average managed to recover from a three-day decline, influenced by elevated bond yields.
Evercore ISI, led by strategist Julian Emanuel, recommends investing in 'negative beta' stocks—those that typically move in the opposite direction of the market—to help investors navigate potential volatility.
They identified 115 such stocks in the S&P 500, narrowing it down to 20, with significant representation from sectors like financials, utilities, consumer staples, and energy, which collectively made up nearly 70% of the list.
Notably, Occidental Petroleum emerged as a standout with a beta of -1.23, indicating strong inverse correlation with market movements, and it recently reported impressive financial results, including $3 billion in free cash flow. Chevron, with a beta of -0.90, also received an outperform rating and announced plans to significantly increase its production in Venezuela.
Other defensive stocks highlighted include Kroger and Altria, which may provide stability in uncertain market conditions