Predictions Markets Are Pointing to a Potential Recession. 3 Stocks to Buy.

Core Viewpoint - The article discusses the potential for a recession in the U.S. and highlights three stocks—Walmart, Netflix, and Philip Morris International—that are expected to perform well in such an economic environment. Group 1: Walmart - Walmart has historically outperformed the market during recessions, including a 21% increase during the COVID-19 crash in 2020 and 3% and 18% increases during the Great Recession in 2007 and 2008 respectively [2][3] - The company is now better positioned to withstand a recession, with approximately 60% of its sales coming from grocery, making it the world's largest grocer [3] - Walmart has attracted more affluent customers through low prices and convenience, such as free same-store delivery via its Walmart+ subscription, which should support growth even in a recession [4] Group 2: Netflix - During recessions, consumers often seek cheaper entertainment options, benefiting Netflix, which saw stock increases of 3% in 2007, 12% in 2008, and 67% in 2020 [6][8] - Losing the bid for Warner Bros Discovery may help Netflix maintain a healthier balance sheet and avoid the challenges of theatrical releases during economic downturns [7] - Netflix's introduction of lower-priced ad-supported tiers positions it well for subscriber growth, while its pricing power remains strong compared to other entertainment options [8] Group 3: Philip Morris International - Philip Morris is expected to outperform during recessions due to the addictive nature of cigarettes, which are less sensitive to economic downturns [11] - The company does not sell cigarettes in the U.S., where volumes have declined, but international volumes remain stable, and the tobacco industry retains strong pricing power [11] - Philip Morris's smoke-free products, such as Zyn nicotine pouches and Iqos heated-tobacco units, are experiencing strong demand and growth, particularly in international markets [12][13]