The global economy is characterized by high inflation and declining growth.
To control inflation, the US Federal Reserve announced, for the first time in 22 years, it will raise interest rates by up to 50 basis points. This was the start of what many believe will be a sharp rise in interest rates this year.
Inflation now threatens economic growth and many warn of stagflation, which means lower economic growth and higher inflation.
UBS believes that US stock markets are not overpriced in stagflation CNBC.
UBS believes that only a 5 percent probability of stagflation is priced in. According to CNBC, UBS has made a list of stocks they’d prefer to bet on against stagflation.
The listed stocks are not sensitive to a number of indicators of stagflation pressure and have more stable margins under poor economic conditions, according to CNBC.
The list includes consumer stocks such as Target, Walmart, Costco, Kroger, eBay and Procter & Gamble.
According to CNBC, energy stocks like ExxonMobil and Chevron and health stocks like Abbott Laboratories, Johnson & Johnson, Pfizer and Microsoft in technology are also on the list.
Very cheap stock
Bernstein splits by value, despite lower earnings support in a number of valuable stocks, according to CNBC
“Value stocks are still very cheap compared to history, and the market valuation gap in both Europe and the US still has a good chance of getting smaller,” Sarah McCarthy told Bernstein, according to CNBC.