JPMorgan Urges Buying Low-Volatility Stocks After 6% Drop as Yields Rise 55 Basis Points
Updated
Updated · CNBC · May 26
JPMorgan Urges Buying Low-Volatility Stocks After 6% Drop as Yields Rise 55 Basis Points
1 articles · Updated · CNBC · May 26
JPMorgan said beaten-down U.S. low-volatility stocks now offer an attractive entry point after falling 6% since the Middle East conflict began, even as bond yields climbed 55 basis points.
Mislav Matejka said the trade could work across multiple macro scenarios: stabilizing or lower yields could lift the group, while a spike in the 10-year Treasury toward 5% could also make low-vol stocks outperform on a relative basis.
Coca-Cola, Rollins and Procter & Gamble are among JPMorgan's favored names, combining dividend yields of 1.37% to 3.01% with analyst-implied upside of roughly 9%, 22% and 15%, respectively.
The picks come from defensive sectors such as staples and services that have recently lagged despite solid company updates, including Coca-Cola's raised outlook, Rollins' well-received investor day and P&G's earnings beat.
JPMorgan urges buying defensive stocks, so why are other major financial institutions currently selling them off?
As war drives inflation, will defensive stocks defy rising bond yields to become the new safe haven?