Analysis: Are we in a Recession?

Where to invest in 2022's volatile stock market.
  • (1:00) – Breaking Down The Current Economy: Are We Really Heading Into A Recession?

  • 10:30) – How Should You Be Position Your Portfolio Right Now?

  • (17:20) – What Can The Housing Market Tell Us About The Economy?

  • (23:40) – What Sectors Stand To Benefit From The Current Market Environment?

  • (32:30) – Episode Roundup: LEN, HD, LOW, JPM, BAC, AMZN, QQQ

  •                [email protected]

Welcome to Episode #319 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is joined by Zacks Chief Equity Strategist and economist, John Blank, to talk about their favorite subject: the US economy.

Is the US economy in a recession? Is it going to head into one shortly as the Fed continues to raise rates? Or can we avoid a recession altogether?

But even without a recession, where should investors be putting their money right now?

Hiding Out in Cash

With stocks in a bear market, John Blank doesn’t think it’s a bad idea to hang out in cash until the fall. Conversely, he also likes the idea of dollar-cost averaging into some deals.

The stock market sell-off may not be over until inflation starts to recede. That may still be a few months away.

But afterwards, John believes there may be a big stock rally as Wall Street breathes a sigh of relief that the Fed’s actions are “working” to ease inflation.

But if you want to buy stocks, where else should you be looking?

Should You Invest in the Big Caps?

1.      JPMorgan Chase JPM

JPMorgan Chase is out of favor with investor in 2022. Shares are down 27% year-to-date and are trading near 52-week lows.

If the US has a deep recession, the banks could get hit hard. But if it’s a shallow recession or not a recession at all, the banks could be a deal.

JPMorgan Chase trades with a forward P/E of just 10.1. It also pays a dividend, currently yielding 3.5%.

Should you be dollar-cost averaging into JPMorgan Chase?

2.      Bank of America BAC

Bank of America is another large bank that is on sale. Shares have fallen 26.2% year-to-date.

Bank of America now trades with a forward P/E of just 9.5. It also pays a dividend, which is currently yielding 2.6%.

Bank of America is a Zacks Rank #3 (Hold) stock.

Is Bank of America oversold?

3.      Amazon AMZN

Amazon was one of the “A” stocks in the FAANG moniker.  These used to be the “sure things” but all of the FAANG stocks are down double digits over the last year.

Amazon shares have lost 35% year-to-date, but are they now cheap?

Amazon still trades with a forward P/E of 200, even as the shares slide, because earnings estimates are being cut. Earnings are expected to decline 84% to $0.53 from $3.24 last year.

It’s a Zacks Rank #5 (Strong Sell).

But is Amazon now oversold?

What Else do you Need to Know About the Economy, the Fed and Investing in 2022?  

Tune into this week’s podcast to find out.

[In full disclosure, Tracey owns AMZN in her own personal portfolio.]

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