The U.S. market is currently bustling with macroeconomic concerns pouring in from all directions. As Wall Street was busy playing the guessing game over the timing of the first rate hike by the Federal Reserve in nine years, the Chinese market equity bubble arose followed by the Greeks' defaulting on their IMF loan.

Needless to say, the European economy’s recuperation seems to be never ending with its strong pillars revealing the cracks underneath. While France, Italy and Spain witnessed modest growth post-stagnation, Germany continued to struggle.

Greece: Thorn in Europe’s Hide

Now Greece is in the spotlight for defaulting €1.5 billion (or about $1.7 billion) to the International Monetary Fund (‘IMF’) and subsequent disagreements with its creditors and ambiguity regarding its solvency and euro membership. Nothing seemed to work in favor of the beleaguered country as it suffered a humiliating loan default to the IMF, similar to nations like Zimbabwe, Sudan and Cuba.

As a last resort, Prime Minister Alexis Tsipras sketched last-minute reform proposals to the European Union to save Greece from the black hole of bankruptcy and probable exit from the Eurozone. Luckily, Greece was able to make a deal with European Union officials just today, and both parties agreed on negotiating a third bailout to avert the “Grexit.”

However, this latest development doesn’t promise a stable economy going forward. Thankfully, the U.S. market has minimal exposure to it and is eyeing the more critically hurt China with bated breath. 

China’s Equity Bubble: A Pin Awaits!

Although Chinese stocks rebounded in Thursday’s trading buoyed by a stream of governmental aid, an apt solution to the inherent problem is still awaited. Over the past one year, the Chinese indices went off-the-charts as its stock market added $6.5 trillion in value. Novice traders are getting deluded into believing that recent overpowering momentum will persist in the future. New account openings in China have multiplied 500% in 2015. In May alone, over 12 million new equity trading accounts were opened in China — a figure which exceeds the entire population of Greece.

Moreover, margin debt, which intensifies volatility, has grown over 120% so far in 2015 to $370 billion. Notably, margin calls increase selling pressure in downturns, and have the potential to turn market corrections into crashes. To add to it, P/E levels are now eclipsing the insanity of the last bubble. Earlier last week, Chinese shares had dipped over 30% as compared to mid-June 2015 levels.

U.S. Economy: Interest Rate Hike Caution

In their Jun 2015 discussion, the Federal Reserve policymakers have shown concern about the ‘unhappy relation’ between Greece and its creditors and China’s financial system stress. Many participants at the 16-17 June Federal Open Market Committee meeting have decided to leave the interest rate unchanged as they foresee weak spots in the economy and foreign risks. 

While the Fed has previously marked September as the best bet for an interest rate liftoff this year, the Greek and Chinese problems may put the date to the latter half of the year.

The Investing ‘Mantra’

The uncertain global economy makes the moderate growth expectations of the U.S. economy attractive enough to consider a portfolio of domestic stocks that are likely to yield healthy ROI. Recovery in the housing market, consistently improving labor market conditions and buoyant consumer sentiment continue to boost economic growth and brighten the outlook for the U.S. economy.

Investors just need to hunt for stocks that will hold steady when the broad market starts to blow hot and cold.

A time-tested way to earn stable returns during market volatility is to invest in low-beta stocks that pay high dividend yields and have solid value metrics. Notably, low correlation stocks provide protection during turbulent times, as they are less prone to day-to-day fluctuations.

4 Safety Jackets to Battle the Economic Storm

We have chalked out 4 ultra-safe stocks based on our style score system, Zacks Rank, low-beta value and dividend yield that are likely to benefit the investors in this turbulent market. The Zacks Style Score for value takes into account all valuation metrics to give us an actionable metric that helps identify stocks truly trading at a discount to intrinsic value. Back-tested results show that stocks with Style Scores of ‘A’ or ‘B’ when combined Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) handily beat all other stocks.

CVR Refining, LP (CVRR - Snapshot Report) is a Texas-based oil refining and marketing firm engaged in the refining of petroleum primarily in the United States. The company operates in Coffeyville, Kansas, Wynnewood and Oklahoma.

Zacks Rank: #1 (Strong Buy)
Value Score: A
Dividend Yield: 15.82%
Beta Value: 0.66

Gas Natural Inc. (EGAS - Snapshot Report) distributes and sells natural gas to end-use residential, commercial, and industrial customers across Montana, Wyoming, Ohio, Pennsylvania, Maine and North Carolina. The company is headquartered in Great Falls, Montana.

Zacks Rank: #1
Value Score: A
Dividend Yield: 4.05%
Beta Value: 0.24

Hatteras Financial Corp (HTS - Snapshot Report) is an externally-managed mortgage real estate investment trust of the U.S. It invests in adjustable-rate and hybrid adjustable-rate single-family residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or U.S. Government-sponsored entities.

Zacks Rank: #2 (Buy)
Value Score: A
Dividend Yield: 11.76%
Beta Value: 0.34

AGL Resources Inc. (GAS - Analyst Report) focuses on distributing natural gas to residential, commercial, industrial, and government clients to its customers across central, northwest, northeast and southeast Georgia and the Chattanooga, Tennessee regions.

Zacks Rank: #2
Value Score: A
Dividend Yield: 4.28%
Beta Value: 0.28

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