Sector rebalancing and nine stocks to keep an eye
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Posted On: 01/27/2023 2:10:50 AM
Sector rebalancing and nine stocks to keep an eye on amid a downturn.
The commonly accepted definition of a recession is a brief period of decreased commerce and manufacturing activity that is typically indicated by a dip in GDP over two consecutive quarters. The GDP shrank at an annual pace of 1.4 percent, down from 6.9 percent in the fourth quarter of 2021, according to the Bureau of Economic Analysis.
Although the macro picture is at best gloomy, it is important to comprehend the larger market dynamics that show where money is moving, such as the economic cycle and sector rotation.
A recession is a well-known natural component of an expanding economy and a stage of the economic cycle. The economy's transition from a growth stage to a recession and back to growth is known as the economic cycle. Since it directly affects stock prices in relation to corporate profitability, this is perhaps the factor with the most impact on the overall markets.
The numerous market sectors, each of which is responsive to a distinct stage of the cycle, are what link the stock market to the economic cycle.
Are you still perplexed? This ought should make it simple.
When the economy is expanding, some industries (such as real estate, consumer brands, and consumer goods) will perform better than others (Healthcare, Food, Consumer Staples, Utilities)
This is referred to as sector rotation or the movement of capital by investors throughout the course of the economic cycle.
Investors typically shift into less cycle-sensitive sectors, such consumer staples and utilities, when the economy is headed for a recession. These sectors are referred to as defensive sectors because they can provide a certain level of protection during a recession.
Some of those defensive names include:
Coca-Cola Co
Albertsons Companies Inc
Altria Group Inc
NRG Energy Inc
PG&E Corporation
Clearway Energy Inc
National HealthCare Corporation
HealthStream, Inc
Regencell Bioscience Holdings Ltd
On the other hand, after a recession ends, investors switch to stocks with a high cycle sensitivity, including industrials and consumer cyclicals.
This is because these sectors tend to benefit from economic growth and increasing consumer spending. Companies in these sectors, such as technology, consumer discretionary, and financials, typically see their profits and stock prices rise as the economy recovers.
When selecting stocks to invest in during a recession, it is important to consider a company's financial health, including its cash flow, debt levels, and overall financial position. In addition, it is important to consider the company's business model and how it may be affected by a recession.
As an early-stage bioscience company, Regencell Bioscience (NASDAQ: RGC) is a Hong Kong-based company focused on the research, development, and commercialization of Traditional Chinese Medicine (TCM) for the treatment of neurocognitive disorders and degenerations.
Regencell Bioscience has a solid financial position, with a strong balance sheet and cash flow, making it well positioned to weather an economic downturn. The company also has a diverse business model, with a focus on both traditional and alternative medicine, which may be less affected by a recession than other industries.
https://www.benzinga.com/general/entertainmen...sion?SNAPI
The commonly accepted definition of a recession is a brief period of decreased commerce and manufacturing activity that is typically indicated by a dip in GDP over two consecutive quarters. The GDP shrank at an annual pace of 1.4 percent, down from 6.9 percent in the fourth quarter of 2021, according to the Bureau of Economic Analysis.
Although the macro picture is at best gloomy, it is important to comprehend the larger market dynamics that show where money is moving, such as the economic cycle and sector rotation.
A recession is a well-known natural component of an expanding economy and a stage of the economic cycle. The economy's transition from a growth stage to a recession and back to growth is known as the economic cycle. Since it directly affects stock prices in relation to corporate profitability, this is perhaps the factor with the most impact on the overall markets.
The numerous market sectors, each of which is responsive to a distinct stage of the cycle, are what link the stock market to the economic cycle.
Are you still perplexed? This ought should make it simple.
When the economy is expanding, some industries (such as real estate, consumer brands, and consumer goods) will perform better than others (Healthcare, Food, Consumer Staples, Utilities)
This is referred to as sector rotation or the movement of capital by investors throughout the course of the economic cycle.
Investors typically shift into less cycle-sensitive sectors, such consumer staples and utilities, when the economy is headed for a recession. These sectors are referred to as defensive sectors because they can provide a certain level of protection during a recession.
Some of those defensive names include:
Coca-Cola Co
Albertsons Companies Inc
Altria Group Inc
NRG Energy Inc
PG&E Corporation
Clearway Energy Inc
National HealthCare Corporation
HealthStream, Inc
Regencell Bioscience Holdings Ltd
On the other hand, after a recession ends, investors switch to stocks with a high cycle sensitivity, including industrials and consumer cyclicals.
This is because these sectors tend to benefit from economic growth and increasing consumer spending. Companies in these sectors, such as technology, consumer discretionary, and financials, typically see their profits and stock prices rise as the economy recovers.
When selecting stocks to invest in during a recession, it is important to consider a company's financial health, including its cash flow, debt levels, and overall financial position. In addition, it is important to consider the company's business model and how it may be affected by a recession.
As an early-stage bioscience company, Regencell Bioscience (NASDAQ: RGC) is a Hong Kong-based company focused on the research, development, and commercialization of Traditional Chinese Medicine (TCM) for the treatment of neurocognitive disorders and degenerations.
Regencell Bioscience has a solid financial position, with a strong balance sheet and cash flow, making it well positioned to weather an economic downturn. The company also has a diverse business model, with a focus on both traditional and alternative medicine, which may be less affected by a recession than other industries.
https://www.benzinga.com/general/entertainmen...sion?SNAPI
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