Photo by Yiorgos Ntrahas on Unsplash

Running Length: 00:17:32

Today’s episode of Full Court Finance at Zacks explores the market as Wall Street enters the heart of first quarter earnings season. The episode then breaks down two dividend-paying stocks reporting this week, NextEra Energy, Inc. (NEE) and Verizon Communications Inc. (VZ) , that investors might want to consider buying at discounts and holding to help combat economic and market volatility.

The market shifted its focus back to soaring inflation and the Fed’s response last week. Consumer prices climbed to another 40-year high in March of 8.5%, driven by energy, food, and more. Wall Street is now increasingly convinced that the Fed will be forced to turn more hawkish in order to combat skyrocketing prices.

Investors are starting to price-in larger, 50-basis point rate hikes going forward. The 10-year U.S. Treasury is already at its highest levels since 2018, having spiked from 1.73% in early March to 2.86% on Monday. Higher rates and the prospect of them continuing to climb has sent the S&P 500 and the Nasdaq falling over the last few weeks, with the benchmark down around 9% from its records and the tech-heavy index 17% off the pace.

Outside of higher rates, JPMorgan and the other giants helped unofficially kick off the heart of first quarter earning season. Wall Street will likely be hyper-focused on guidance and how companies expect to navigate the current economic turmoil, including inflation, supply chain bottlenecks, the Russian invasion of Ukraine, and more.

In the face of everything, investors might still want to remain on the hunt for strong stocks to buy because Wall Street could be left chasing returns in equities if they hope to outclimb 8.5% inflation. Market timing is also a very difficult task. And despite all of the factors tugging at the economy and the market, the outlook for S&P 500 companies in 2022 and beyond shows resilience and growth.

The first stock on the docket today is NextEra Energy ahead of its Q1 fiscal 2022 financial release on Thursday, April 21. NextEra Energy is one of the country’s biggest electric utilities and a leader in renewable energy. NextEra is set to benefit from the expansion of wind, solar, and nuclear going forward. NEE stock has crushed the market over the last five years. A recent pullback has NextEra stock trading at a nice discount and its dividend yield tops the S&P 500.

Verizon will report first quarter financial results on Friday, April 22. Verizon has expanded its reach through some acquisitions, while shedding some of its non-wireless segments in order to focus on its core business as it pushes forward with its 5G goals. Verizon’s valuation is looking ripe and its dividend yield should help investors try to tackle inflation.