Defensive Stocks to Consider Amid Jamie Dimon's Concerns About a Major Market Correction

Often asked for his opinion and economic outlook, JPMorgan Chase JPM CEO Jamie Dimon hinted at fears of a broader economic slowdown and the possibility of a sharp stock market correction during an interview with Bloomberg on Thursday.

Pointing out that inflation has been higher than expected every month so far this year, with the exception of April’s CPI data, Dimon’s concerns focused on the idea that inventories are high and that every time we anticipate a soft landing, things can go wrong.

Dimon compared suggestive inflationary and geopolitical risks with large corrections/recessions in which there were many signs but still not expected in the previous year, such as the stock market crashes of 1974 and 1982 (Black Monday) as well as the more recent real estate market. collapse in 2008 that triggered a more serious financial crisis.

These scenarios certainly provide food for thought, with the benchmark S&P 500 hitting new record highs this week and making stocks likely to hold up during a possible correction more attractive.

Defensive actions to consider

Walmart WMT: Historically known for weathering economic downturns and market volatility, Walmart’s stability and reliability make its stocks a top pick during corrections. The omnichannel giant’s diversification into e-commerce has only increased its operational efficiency, with Walmart reporting its first quarter results on Thursday and posting sales growth of 6% while adjusted operating profit soared 13%. .

Image source: Zacks Investment Research

Utility stocks: Due to their stability and dividends, market interest tends to shift towards more conservative sectors of stocks like utilities during transition periods. increased volatility with Duke Energy DUKNextEra Energy NEEand the southern society SO being three of the largest utility stocks in terms of market value.

Image Source: Zacks Investment Research

Gold mining stocks: Have a track record of maintaining its value during economic times Youuncertainty As traditional currencies weaken, gold tends to be one of the preferred defensive assets. Notably, several gold mining stocks currently sport a Zacks Rank #1 (Strong Buy), including Agnico Eagle Mines AEM, AngloGold Ashanti AU.and Gold Fields Limited GFI.

Honorable mention

Nvidia NVDA is a bit of a dark horse in this narrative of stocks providing defensive security.. Although inflation tends to have a detrimental effect on the technology sector as a whole, economic growth linked to the demand for artificial intelligence is expected to continue. This has started to peak sentiment in certain technology stocks, even during times of economic headwinds. Being revered as the market leader in producing semiconductor chips that power AI, it is notable that Nvidia currently sports a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click to get this free report

NextEra Energy, Inc. (NEE): Free Stock Analysis Report

Southern Company (The) (SO): Free Inventory Analysis Report

Duke Energy Corporation (DUK): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

AngloGold Ashanti PLC (AU): Free Stock Analysis Report

Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report

Gold Fields Limited (GFI): Free Stock Analysis Report

JPMorgan Chase & Co. (JPM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investing Research