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The S&P 500 closed the week beneath its key 50-day shifting common as traders bought shares within the face of omicron and inflation fears. The Nasdaq additionally dropped in a transfer that pushed this Index beneath key assist as effectively and into damaging territory. In a real indication of a risk-off atmosphere, small-cap shares plummeted 4.4% — pushing these shares additional right into a downtrend.
Not all areas of the market suffered final week, nevertheless, as Staples, Utility and REIT shares had been flat or posted beneficial properties. Along with being defensive, traders had been drawn to the yields. Even when larger inflation persists, as Fed Chair Powell is suggesting, dividend shares have a built-in benefit over different yield-paying devices — notably, their capability to place by means of dividend will increase that exceed the speed of inflation.
With that backdrop, I screened the 65 Dividend Aristocrat shares for candidates which are at the moment in a position to buffer the downtrend occurring elsewhere.
Dividend Aristocrats are firms which are within the S&P 500 and never solely persistently pay a dividend to shareholders, however have posted a rise of their yield for no less than 25 years in a row. Under are firms which are part of this elite group and, along with being in defensive areas which are at the moment holding up within the face of promoting elsewhere, are posting strong development numbers that ought to proceed to assist any strikes larger.
DAILY CHART OF PEPSI (PEP)
First up is Pepsi (PEP), which has been posting dividend will increase for the longest of all Aristocrats — 68 years, to be precise. The beverage and snack producer simply reported third-quarter earnings that had been forward of estimates and, in October, introduced one other worth enhance within the face of upper provide prices.
Shopper Staples shares have a better capability to boost costs, as their merchandise have a tendency to remain in demand regardless of rockiness elsewhere. PEP is now able to commerce larger after breaking again above its shorter-term shifting averages, whereas its momentum indicators are in a constructive place.
DAILY CHART OF McCORMICK & CO. (MKC)
Subsequent up is one other Staples firm that is gained elevated revenues, as people proceed to prepare dinner at dwelling regardless of a latest reopening of eating places throughout the nation. McCormick & Firm (MKC) is a maker of seasonings, spices and herbs, and the inventory has been in an uptrend following analyst upgrades to earnings within the face of elevated gross sales.
MKC’s latest break again above its 200-day shifting common on quantity has confirmed its uptrend, whereas a latest golden cross sign helps affirm it. MKC presents a 1.7% yield and, final week, they introduced a rise of their quarterly dividend. With the momentum indicators in constructive territory, the inventory is poised for additional upside regardless of weak spot elsewhere.
DAILY CHART OF PROCTER & GAMBLE CO. (PG)
Final up is private care firm Procter & Gamble (PG), which has been growing their dividends for 64 years in a row. The producer of magnificence care, tissues and diapers has additionally been in a position to elevate costs within the face of elevated prices. The two.3%-yielder has seen no slowdown in gross sales, with analysts elevating earnings estimates for each this yr and subsequent.
Final week, the inventory had a 3-day rally into the tip of the week whereas many different shares struggled. The transfer pushed PG to a brand new excessive in worth on elevated quantity and, with its RSI and MACD in constructive territory, the inventory is poised for additional near-term upside.
Outdoors of the shares talked about above, it has been a really tough interval for the markets. Subscribers to my MEM Edge Report have been saved updated with the weakening circumstances and, if you would like to be alerted to when the markets flip constructive, be sure and use this link to receive a 4-week trial at a nominal fee. Along with any shift in market circumstances, you will even be suggested of the very best inventory candidates that can outperform when a brand new uptrend takes place.
On this week’s edition of The MEM Edge, I evaluate present market circumstances and what to be looking out for to show constructive. I additionally reveal pockets of power in development areas that are perfect for your watch-list, in addition to risk-off candidates.
On this week’s edition of Chartwise Women, Erin Swenlin and I focus on the cycle of market feelings and the way they’re affected by present occasions. We share what they’ve realized about investor sentiment and the instruments used to gauge it.
Warmly,
Mary Ellen McGonagle
President, MEM Investment Research
Mary Ellen McGonagle is an expert investing marketing consultant and the president of MEM Funding Analysis. After eight years of engaged on Wall Road, Ms. McGonagle left to develop into a talented inventory analyst, working with William O’Neill in figuring out wholesome shares with potential to take off. She has labored with purchasers that span the globe, together with massive names like Constancy Asset Administration, Morgan Stanley, Merrill Lynch and Oppenheimer.
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