[music] Welcome to Stocks and Translation, Yahoo Finance's video podcast that cuts through the market mayhem, the noisy numbers, and the hyperbole to give you the information you need to make the right trade for your portfolio. I'm Jared Blickery, your host. And with me is my co-host, Yahoo Finance senior reporter Brooke Depalma, who's here to connect the dots and to be that bridge between Wall Street and Main Street.Today we're going to be talking about market technicals, reading the tea leaves and charts ...

Traders went risk off.Amid heightened volatility in the stock market, investors sought shelter in defensive stocks on Tuesday.By the close of trading, Walmart (WMT +3.04%), Verizon (VZ +3.84%), and Altria (MO +3.10%) all saw their stock prices rise by roughly 3%. Defense wins championshipsBefore you can grow your wealth, you must first protect it. That was the theme of the day in the financial markets.The Nasdaq Composite Index fell 1.4%, as many tech stocks sold off. Investors' risk appetites are shrinking ...

Core Insights - The article discusses the impact of ongoing inflation on the Federal Reserve's monetary policy and suggests focusing on low-beta defensive stocks to navigate market volatility [2][3][10] Economic Context - Inflation has risen, with the personal consumption expenditure (PCE) index increasing by 2.8% year-over-year in November, moving further away from the Federal Reserve's 2% target [6][8] - Personal income growth has slowed, with increases of 0.1% in October and 0.3% in November, below analysts' expectations [9] Investment Recommendations - Investors are advised to consider low-beta defensive stocks, particularly in the utility and consumer staples sectors, to mitigate market fluctuations [4][5] - Featured stocks include: - **Ameren Corp. (AEE)**: Expected earnings growth rate of 8.2%, Zacks Rank 2, beta of 0.58, dividend yield of 2.78% [12][13] - **Fortis, Inc. (FTS)**: Expected earnings growth rate of 4.2%, Zacks Rank 2, beta of 0.50, dividend yield of 3.46% [14][15] - **ONE Gas, Inc. (OGS)**: Expected earnings growth rate of 11.8%, Zacks Rank 2, beta of 0.81, dividend yield of 3.47% [16] - **Hormel Foods Corp. (HRL)**: Expected earnings growth rate of 6.6%, Zacks Rank 2, beta of 0.33, dividend yield of 4.76% [17] - **J&J Snack Foods Corp. (JJSF)**: Expected earnings growth rate of 4.5%, Zacks Rank 2, beta of 0.34, dividend yield of 3.43% [18][19]

Market Overview - The market is experiencing significant volatility, akin to a person with sudden mood changes, influenced by various headlines and events, particularly from Davos and Japan [2][3] - The VIX and move index have shown high movements, indicating increased market fluctuations [2] Defensive Strategies - In the current market, a tactical approach is necessary, with an emphasis on defensive positions in investment portfolios to manage volatility [3] - Traditional defensive stocks, such as staples, have underperformed, suggesting a need to look elsewhere for defensive investments [4][5] - Companies with low price-to-earnings ratios, strong cash flows, and solid balance sheets are recommended for defensive plays, particularly in the financial and industrial sectors [5] Financial Sector Insights - Regional banks, particularly PNC, are showing strong performance, with PNC reporting record revenue growth and a 21% year-over-year EPS growth [6][7] - The efficiency ratio is crucial for regional banks, and PNC is improving in this area, making it a strong candidate for investment [7] Economic Challenges - The upcoming earnings season is viewed as a significant challenge, alongside potential government shutdowns and persistent inflation concerns [8][9] - The Super Core inflation rate is reported at 3.3% year-over-year, indicating ongoing inflationary pressures [9] - Concerns regarding the labor market persist, adding to the economic challenges that could affect market performance [10]

Core Insights - Defensive consumer staples stocks are becoming increasingly popular among investors during market volatility, as they provide essential goods regardless of economic conditions [2] - Walmart Inc. has emerged as a strong performer in the defensive sector, with its stock up 23.8%, although it is trading at a premium valuation of approximately 39 times earnings [3] - Costco Wholesale Corp. has seen a decline of 5.5% in its stock price, currently trading at 46 times earnings, which is a discount compared to its historical average [3] - Procter & Gamble is down over 14% due to competition from private label brands, but it is trading at around 21 times earnings, indicating a potentially attractive valuation [4] - The outlook for these defensive stocks varies depending on economic conditions, with analysts divided on whether the U.S. economy will experience growth, a slowdown, or stagnation [4] Company Summaries - Walmart has been the standout performer in the defensive category, but investors are paying a premium for its consistent performance [6] - Costco's recent stock pullback does not necessarily make it a bargain, as it is still priced for strong execution despite a challenging year [6] - Procter & Gamble appears to be reasonably valued, but ongoing pressure from private-label brands may limit its growth potential if the economy slows [6]

Economic Overview - Consumer confidence in the United States fell to 89.1 in December, a decline of 3.8 points from November's 92.9, indicating growing concerns over jobs and income amid a weakening economy [4][10] - The Present Situation Index dropped 9.5 points to 116.8, reflecting a negative assessment of current business and labor market conditions [4] - The Expectations Index remained unchanged at 70.7, staying below the 80 mark for 11 consecutive months, which signals a potential recession [5] Federal Reserve Actions - The Federal Reserve cut interest rates by 25 basis points three times in the current year but indicated only one rate cut for the next year due to persistent high inflation [5][6] Market Trends - A significant tech selloff has occurred, with investors offloading tech stocks due to concerns over profitability against high valuations, leading to a loss of momentum in the tech rally [6][10] Investment Recommendations - Investors are advised to focus on low-beta, defensive stocks from the utility and consumer staples sectors to mitigate market volatility [2][10] - Recommended stocks include: - **Atmos Energy Corporation (ATO)**: Expected earnings growth rate of 6.7%, beta of 0.75, and a dividend yield of 2.38% [8][7] - **American States Water Company (AWR)**: Expected earnings growth rate of 5.1%, beta of 0.70, and a dividend yield of 2.76% [12][11] - **Sempra (SRE)**: Expected earnings growth rate of 12.1%, beta of 0.73, and a dividend yield of 2.91% [13] - **Ingredion Incorporated (INGR)**: Expected earnings growth rate of 1.6%, beta of 0.72, and a dividend yield of 2.94% [14]

Core Viewpoint - Apple has demonstrated resilience in its stock performance throughout 2025, achieving a year-to-date gain of 12.1% despite market volatility [1][4]. Stock Performance - Apple's stock closed at $273.40 on December 29, 2025, up from approximately $243.85 at the beginning of the year [1]. - An investment of $1,000 at the start of 2025 would now be worth about $1,121, reflecting a gain of approximately $121 [3]. Market Dynamics - The stock experienced a dip below $200 during a market pullback in Q1 but gradually recovered, with significant gains in the second half of the year [4]. - By November, AAPL shares reached new highs above $280 before slightly consolidating at year-end, indicating strong investor demand for Apple's defensive characteristics [5]. Revenue and Growth Drivers - Apple's performance has been supported by growth in its high-margin services segment and ongoing share repurchases, which have stabilized earnings and investor sentiment [6]. - Despite mixed hardware demand, recurring revenue from subscriptions, payments, and digital services has been crucial for maintaining performance [6]. Capital Return Strategy - The company has maintained an aggressive capital return strategy, which serves as a long-term benefit for shareholders, especially during uncertain market conditions [7]. Analyst Outlook - Analysts view Apple as a core long-term holding heading into 2026, with expectations for moderate growth compared to AI-centric stocks [8]. - Apple's pricing power, brand strength, and ecosystem lock-in continue to attract institutional capital, positioning it as a defensive anchor within technology portfolios [9].

Core Viewpoint - The focus is on gradually increasing positions in defensive stocks that offer decent dividends in an unpredictable market [1] Group 1 - The strategy involves seeking relatively safe investments to mitigate risks associated with market volatility [1]

Core Viewpoint - Defensive stocks like Carrefour SA are currently overlooked by investors as markets approach all-time highs, which may present a unique opportunity for long-term investment strategies [1] Group 1: Market Context - Markets are trading close to all-time highs, leading to a lack of interest in defensive stocks [1] - The current market environment favors high-risk investments over defensive options [1] Group 2: Investment Strategy - The investment approach focuses on fundamental long-term perspectives, combining long stock positions with covered calls and cash secured puts [1] - The analyst has a background in investing since 2011, primarily in REITs, preferred stocks, and high-yield bonds, indicating a solid foundation in various investment vehicles [1]

As investors reconsider massive bets on AI stocks, a rotation toward more defensive corners of the US equity market has left a clear winner: health-care companies https://t.co/LB1Ubv4yF6 ...