5 Defensive Stocks to Counter Volatility as Post-Election Rally Halts

Market Overview - The post-election rally has paused as investors reassess the economy's health and Federal Reserve comments, following a significant rally after Donald Trump's election win [1] - The Dow recorded its best post-election day rally in over 128 years, with the S&P 500 and Nasdaq reaching all-time highs, but volatility returned due to rising inflation and macroeconomic factors [2] Economic Indicators - The Dow fell by 0.5%, while the S&P 500 and Nasdaq each declined by 0.6% as inflation data showed a month-over-month rise of 0.2% in October and a year-over-year increase of 2.4% [5] - Core PPI rose by 0.3% sequentially in October and 3.1% year-over-year, while CPI showed a 0.2% month-over-month rise and a 2.6% year-over-year increase [6] Federal Reserve Insights - The Federal Reserve cut interest rates by 50 basis points in September and an additional 25 basis points post-election, but recent inflation data raised concerns about future rate cuts [7] - Federal Reserve Chairman Jerome Powell indicated that the central bank is not in a hurry to cut rates, suggesting a careful approach due to the economy's strength [8] - Markets are currently pricing in a 62.6% chance of a 25-basis-point rate cut in December, down from 82.5% [9] Investment Recommendations - Defensive stocks such as Avangrid, Inc. (AGR), Atmos Energy Corporation (ATO), DTE Energy Company (DTE), The Clorox Company (CLX), and Ingredion Incorporated (INGR) are recommended for investment due to their low-beta and high-dividend yield characteristics [3][4] - Avangrid, Inc. has a beta of 0.55, a current dividend yield of 4.91%, and an expected earnings growth rate of 12% for the current year [10] - Atmos Energy Corporation has a beta of 0.68, a current dividend yield of 2.20%, and an expected earnings growth rate of 4.8% [12][13] - DTE Energy Company has a beta of 0.68, a current dividend yield of 3.44%, and an expected earnings growth rate of 17.6% [15][16] - The Clorox Company has a beta of 0.41, a current dividend yield of 2.95%, and an expected earnings growth rate of 10.5% [18][19] - Ingredion Incorporated has a beta of 0.73, a current dividend yield of 2.13%, and an expected earnings growth rate of 12.5% [21][22]