Volatility Likely To Persist: 5 High Yielding Stocks Picks

After a tumultuous 2018, U.S. stock markets have received some respite in 2019 so far. Although Wall Street displayed signs of recovery, several headwinds still persist. Lingering trade related conflict between the United States and China, fears of a global economic slowdown, geopolitical uncertainties like the Brexit issue and uncertainty regarding Fed’s monetary stance in 2019 are near-term concerns.

Investment in high-dividend paying stocks, over a reasonable time period, is likely to bring good returns, especially under market turmoil. Consequently, it would be a prudent investment decision to bank on stocks with promising dividend yield and a favorable Zacks Rank.

Concerns over Global Economic Slowdown

On Jan 21, the International Monetary Fund (“IMF”) reduced global economic growth forecast for 2019 and 2020. The fund reduced its global growth projection for 2019 to 3.5% from 3.7% in October. Likewise, global growth projection for 2020 was reduced to 3.6% from 3.7% in October, marking the second curtailing in last three months.

Per IMF, growth rate in advanced economies is on the decline while it has slowed down in emerging economies. Advanced economies are likely to grow by 2% and 1.7% in 2019 and 2020, respectively. Meanwhile, emerging economies are expected to grow by 4.6% and 4.9% in 2019 and 2020, respectively.

For the IMF, the 10-month old trade conflict between the United States and China is a major concern. The Chinese economy grew 6.6% in 2018, its slowest pace since 1990. Contagion effect of Chinese slowdown is likely to affect other emerging countries. Moreover, prolonged problem related to Brexit in the U.K. is another concern.

Conflicting News on Trade War Front

According to CNBC, the U.S. government has rejected a trade meeting with China scheduled to be held this week on the ground of gross disagreements over intellectual property rights. The primary concern of the Trump administration stems from the apprehension that China is stealing intellectual property from U.S. companies by unfair means.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this ...

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