Wall Street is sliding lower on Thursday, weighed down by word that United States manufacturing activity fell into contractionary territory for the first time in nearly 10 years. A recession certainly seems like a growing possibility as the U.S.-China trade spat bites hard alongside the delayed response of all those Federal Reserve interest rates hikes of recent years.
Adding to the pressure was a disappointed reaction to yesterday’s release of the latest Federal Reserve meeting minutes, which revealed that policy makers are quite skeptical about the need for further interest rate hikes at this juncture. This stands in sharp contrast to the market’s expectations for the start of an aggressive rate cut campaign.
With all the crosscurrents, investors would do well to focus their attention on the more defensive names in the market. Here are four mega-cap stocks to buy that are perking up.
Mega-Cap Stocks to Buy: Boeing (BA)
The clouds are finally starting to part for Boeing (NYSE:BA) shares as prices move to challenge the 50-day and 200-day moving averages. Watch for a rise to the upper end of the post-March trading range near $390, which would be worth a gain of roughly 10% from here. Shares are pushing higher thanks to a reiteration of a buy rating by analysts at Cowen on expectations of a 737 MAX recertification flight within the next four to six weeks. Once the 737 MAX gets flying again, investors can once again focus on a massive order backlog.
The company will next report results Oct. 23 before the bell. Analysts are looking for earnings of $2.31 per share on revenues of $20.4 billion. When the company last reported July 24, a loss of $5.82 beat estimates by 84 cents.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) is on a steady climb higher, holding above its 50-day moving average, capping a nice 25% rally off of its March low. Shares were recently added to Morgan Stanley’s “Fresh Money Buy List” on stronger price power, volume growth and new products bolstering earnings per share growth. Nice qualities to have in a defensive business at a time like this.
The company will next report results Oct. 30 before the bell. Analysts are looking for earnings of 56 cents per share on revenues of $9.5 billion. When the company last reported July 23, earnings of 63 cents per share beat estimates by 2 cents on a 6.1% rise in revenues.
McDonalds (MCD)
With traffic trends improving thanks to new promotional initiatives, McDonalds (NYSE:MCD) stock is performing well and enjoying a steady rise alongside its 50-day moving average. Longbow analysts recently did a channel check and found that third-quarter same-store sales growth is tracking in line with expectations. Analysts at MKM Partners recently initiated coverage with a buy rating and a $250 price target.
The company will next report results Oct. 22 before the bell. Analysts are looking for earnings of $2.21 per share on revenues of $5.5 billion. When the company last reported July 26, earnings of $2.05 matched estimates on a 0.2% decline in revenues.
Procter & Gamble (PG)
Shares of consumer staples icon Procter & Gamble (NYSE:PG) are also enjoying a smooth and steady rise alongside its 50-day moving average. The company has been largely able to shrug off higher costs by pushing through the impact to consumers thanks to strong brand power and innovative products.
The company will next report results Oct. 18 before the bell. Analysts are looking for earnings of $1.24 per share on revenues of $17.5 billion. When the company last reported July 30, earnings of $1.10 beat estimates by 5 cents on a 3.6% rise in revenues.
As of this writing, William Roth did not hold any of the aforementioned securities.
