Click here: The Weekly Beacon – July 29 2022

We will be giving some macroeconomic market updates on a weekly basis. No
recommendations will be given in this commentary and we encourage you to contact us
today if you have any questions regarding any observations.

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This weeks issue: Recession proof Stocks, Consumer defensive stocks, Stocks that Perform well during a Recession, Walmart Stock, Target Stock, Costco Stock, Utility Stocks, Fast Food Stocks, P/E Multiples, Investor Risk Levels, Bank of America Survey, Consensus Recession, Consumer Sentiment, University of Michigan Sentiment Index, Biden, and Co. Change Recession Definition, Recession Definition, Quarterly Contraction, 2022 Recession, Darkness in New Zealand, Sri Lanka Mess, ESG Countries, UK Power Prices, Natural Gas Futures, Cold Winter, Oil Stock Earnings, Energy Dividends, Record Level Earnings for Energy, Coinbase Stock, Anti Cramer Index, SEC vs. Coinbase.


Not so Defensive, Not Recession Proof

As recession fears increase, investors have jumped ship from unprofitable technology, and hype stocks and have jumped for safety in defensive, non-cyclical companies, and even utility stocks. Investors fearing a recession bought companies that would perform well no matter the economic backdrop. Investors jumped into companies whose top and bottom lines would be the least impacted by a recession. Grocery stores, big box retailers, food and drink producers (General Mills, Pepsi), and even certain fast food companies. The biggest companies people flocked to were Walmart, Costco, and Target.

In early 2022, move Walmart released its earnings and decreased its projections when providing sales guidance for the rest of 2022. Walmart lowered its fiscal second-quarter and full-year profit guidance. Blame inflation, which is helping push up overall sales, but decreasing shoppers’ ability to spend on anything but essentials.

Walmart’s stock dropped 6% for its biggest single-day loss of 2022. Other retail giants were also hit quite hard as the guidance will affect competitors like Target and even Amazon. Remember a month ago, Target announced revenue and profit cuts as well as stale inventory that was hurting its business. We assume that will be the case for quite some time.