Basic goods and utilities: sectors protected from recession News ad

How The recession is growing And the fear index falls towards the levels that the last time saw during the panic of the pandemic in March 2020, the United States and global actions receive a significant blow. Investors begin to feel pressure, since trade tension is reviving, with China and the European Union, key American trading partners, doubleting return tariffs. Without any trade permission, the market continues the spiral below.

Technological actions suffered especially strongly, since investors aggressively get out of risk assets. On the eve of the opening of Monday, futures signal the further losses. SPDR ETF technological sector NYSEARCA: XLK Currently decreased by 21.5% since the beginning of the year and a 25% discount of a 52-week maximum from Friday. Meanwhile, as of Friday, S&P 500 fell by almost 18% after his recent peak.

With this level of volatility and uncertainty, many investors can ask the question: what sectors are usually superior to a recession and a time of fear? At that time, as not a single angle of the market is completely immune to the sales, History shows that two sectors, consumer goods and utilitiesAs a rule, to ensure relative safety and stability during a decline.

Consumer main products: classic protective game

The main products of consumers choose the SPDR ETF sector NYSEARCA: XLP A little more than 7% of its 52-week maximum as of Friday decreased, which is much smaller than a wider market. This relative force reflects Defensive nature of the sector. It also offers a dividend yield of 2.6%, adding an income pillow in volatile periods.

Consumer trading includes everyday necessity of essential items, such as toothpaste, household cleaning medium, food and drinks. Regardless of how bad the economy is, people still need to buy these goods. This sustainable demand benefits companies such as Procter & Gamble, Coca-Cola, Walmart and Johnson & Johnson, which gives the sector a reliable advantage over a large number of cyclic industries, such as technology or discretion retail trade.

Although the sector was not immune to the sale, its softer decline signals defensive positioning. However, investors must continue with caution. On Friday, XLP closed below the growing 200-day sliding average and seems to open on Monday. Observation of how Costco, Walmart and Coca-Cola, viewing signs of stabilization and relative power, can help investors determine when the sector begins to attract interest in interest as a shelter.

Utilities: stability and dividends in indefinite times

Utilities select SPDR ETF sector NYSEARCA: XLU He also showed noticeable stability. Since the beginning of the year, it has decreased by only 1.5% and approximately 11% of its 52-week maximum, which is much less than the S&P 500. Like consumer crossing, utilities make benefits from their significant nature and reliable income streams that help them Weather economic storms are better than most sectors.

The utility sector includes companies that provide critical services, such as electricity, natural gas, water supply and sewer systems. These services are necessary regardless of economic conditions, which makes the sector a historically strong executor during downs. XLU also offers an attractive dividend yield of 3.06%, which can appeal to Investors oriented on income In turbulent markets.

Nevertheless, the sector did not escape from a broader pain in the market. On Friday, XLU fell by more than 5%, and, based on futures, he seems to be ready for another tough session on Monday. Many of its main shares, including the southern company, Duke Energy and Nextra Energy, are traded near or below their 200-day SMA. Investors may want to carefully monitor these names to see if they will begin to ahead of the market, Alarm the shift towards protection.

Positioning for growth due to stability

Trade products and utilities historically were two sectorsAmong other things, for investors seeking stability during market turbulence and recession periods. Although the current sale is intense, and the geopolitical background remains uncertain, these two sectors can offer a safety measure and, possibly, even opportunities for long -term investors who seek to withstand the storm.

As always, observation of the signs of relative power and stabilization in the upper assets can help confirm whether the capital rotates into these traditionally defensive sectors.

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