We have gloomy market for Wednesday.
Global shares are down after fading optimism for trade after Beijing warned of retaliation over Senate-approved law insurance to support human rights in Hong Kong, and President Donald Trump threatened China with several tariffs.
Undoubtedly, geopolitical tensions seem to follow us all the way into 2020, along with concerns about whether the global economy can hold on and as a US election loom.
In our conversation investment management company Nuveen's head of shares Saira Malik says that investors can strengthen their own portfolio defense ahead of an uncertain year by doing this one thing ̵
next year. She rattles off a list of factors she believes may weigh on returns – the current low-interest environment, geopolitical ups and downs, persistent fears about the longest-lived bull market in history, and still high earnings estimates for next year.
But even if the worst happens – a global recession that she doesn't think will last that long anyway – stock picking will be the key, leading us to her tree stocks survival kit: Walmart
WMT, -0.30% ,
MRK, + 0.62%
KO, + 0.09%
KO, + 0.09% .
These are quality companies that are less utilized for how the economy will perform, says Malik.
“These are companies that are survivors and are already strong companies. Although the stock price has a short-to-medium dip, they will do well, "says Malik.
Merck's health business, for example, has strong product dominance in its sector, while beverage maker Coca-Cola is" Moving beyond just a soft drink business into a a total beverage company. "Walmart reseller, as opposed to Amazon behemoth
AMZN, + 0.01% ,
has a strong multi-channel offering, which means it sells products through physical stores and other means.
But Walmart will cost you less, she points out. Expected price / earnings – a popular measure of how much a stock is worth – is around 23 times. Compare that to 54 times for Amazon.
YM00, -0.26% ,
futures are under pressure. The Asian markets
fell and European stocks
is heading for the worst fall in six weeks.
Bringing home the craze was this tweet from Hu Xijin, the influential chief editor of China's state-run Global Times.