5 High Yield Blue Chip Stocks To Withstand Market Turmoil

By last week, signs were rife that this year’s furious market rally is waning. The debacle, which ensued on Mar 4, more or less confirmed such aspersions. The Dow slumped to a two-week low as investors preferred caution over-optimism on the impending trade deal with China. Valuation concerns dampened sentiment, taking the wind out of a two-month-old rally.

At this point, investors seem to have largely priced in the impact of a much-awaited trade deal. At this point, global slowdown concerns are likely to put the brakes on equity gains. A decline in construction spending has also led to speculation that the estimate for fourth-quarter GDP will be revised lower.

Investing in blue-chip stocks makes perfect sense at this point. The first choice of investors with a conservative approach, these low-volatility stocks are ideal for capital preservation and steady dividend payouts during tough times.    

Global Slowdown Concerns Linger

On Jan 21, the International Monetary Fund (IMF) reduced its global economic forecasts for this year and the next. These early fears seem to be borne out by the struggles of the world’s second-largest economy. On Mar 4, China cut its GDP forecasts and proceeded to announce a tax cut to deal with economic deceleration.

For the first time, China’s government lowered its GDP target for 2019 to a band of 6 to 6.5%. This provides policymakers with some breathing room but still compares unfavorably with last year’s target of “about” 6.5%.

China’s GDP numbers were essentially a casualty of the recent trade tensions. This was also the case with February’s downward revision in Germany’s growth projections. Concerns over the global trade climate led the EU to cut its current-year GDP estimate from 1.8% to 1.1%. The entire Eurozone is now expected to expand at only 1.3% in 2019, significantly lower than the earlier estimate of 1.9%.

Trade Deal Fatigue Sets in, Construction Spending Falls

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