Invest Like a Hawk: 7 Stocks to Own If the Fed Stays Tough

Core Viewpoint - The article discusses the potential impact of the Federal Reserve's monetary policy on various stocks, particularly in the context of possible interest rate hikes and the current economic landscape marked by inflation and geopolitical tensions. Group 1: Federal Reserve and Economic Context - The Federal Reserve's previous focus on potential interest rate cuts has shifted, and now stocks may be considered for Fed hikes if the policy turns hawkish [1] - High interest rates lead to increased borrowing costs, which, combined with a robust labor market, creates inflationary pressures as more dollars chase fewer goods [1] - Geopolitical tensions have caused crude oil prices to spike, which could lead to price increases across various product categories [1] Group 2: Stock Recommendations - JPMorgan Chase (JPM): A financial institution that could benefit from higher profitability if interest rates remain elevated. The stock has a forward annual dividend yield of 2.54% and is expected to have earnings per share (EPS) of $16.12 for fiscal 2024, up from $14.96 last year [3][4] - Berkshire Hathaway (BRK-B): Known for its resilience in various market conditions, analysts rate it as a moderate buy with an implied double-digit upside potential. EPS is expected to reach $18.55 for the current fiscal year, an improvement from $17.19 [6][7] - Home Depot (HD): A reliable investment due to its consistent performance in home improvement, with EPS anticipated at $15.36 for fiscal 2025, up from $15.11 last year [8][9] - Kenvue (KVUE): A consumer health products company that is expected to have EPS of $1.14 for fiscal 2024, slightly down from $1.29 last year, but with sales projected to rise to $15.64 billion [11][12] - Realty Income (O): A REIT with a forward annual dividend yield of 6.07%, expected EPS of $1.53 for fiscal 2024, and sales anticipated to grow by 21% to $4.94 billion [13][14] - American Tower (AMT): A REIT focused on communications real estate, with analysts projecting EPS of $7.15 for the current fiscal year, significantly higher than last year's $3.18 [16][17] - Kinder Morgan (KMI): A midstream energy operator with a focus on storage and transportation, expected EPS of $1.22 for the current fiscal year, up from $1.06, and sales projected at $17.55 billion, a 15.8% increase [18][19]