The stock market started the year on a positive note after a year filled with macroeconomic and geopolitical challenges.
The rally was driven by the Federal Reserve’s smallest rate increase since the beginning of the monetary policy tightening in March 2022 and Fed Chair Jerome Powell’s acknowledgment that inflation was showing encouraging signs.
However, investor sentiment has taken a hit lately as minutes from the central bank’s monetary policy meeting indicated that the rate hikes will not end anytime soon. The Fed officials believe interest rates need to increase and stay elevated until inflation reaches 2%.
The officials’ resolve was backed by the 0.6% sequential and 5.4% year-over-year rise in the Personal Consumption Expenditure (PCE) and the hotter-than-expected jobs report. The market expects the Fed to raise the fund rate beyond 5% this year.
However, JPMorgan CEO Jamie Dimon believes a soft landing is “still possible.” Goldman Sachs believes the chances of the American economy slipping into a recession are now just 25%, down from its previous estimate of 35%. Moreover, President Joe Biden recently said he believes the U.S. economy will not fall into a recession this year or next.
Given this backdrop, it could be wise to make the most of the strong uptrend in fundamentally strong stocks, The Hershey Company (HSY), Acuity Brands, Inc. (AYI), and Flowers Foods, Inc. (FLO).
The Hershey Company (HSY)
HSY engages in the manufacture and sale of confectionery products and pantry items. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International.
It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; pantry items, baking ingredients, toppings, beverages, and sundae syrups; and snack items. Continue reading "3 Stocks You Can't Go Wrong With"