According to Citi, investors looking to escape selling pressure should look for stocks that can withstand economic turmoil and are currently more attractively valued. Major stock indexes were pressured by a series of weak U.S. economic data, which has raised concerns that a recession is looming. The unwinding of the Japanese yen’s carry trade also contributed to the decline in stock prices, with the Dow Jones Industrial Average and the S&P 500 recording their first one-day declines in nearly two years on Monday. Against this backdrop, Citi has compiled a “Shopping List for After the Stock Market Draw,” listing stocks that meet the following criteria: They must be within the top 500 market capitalizations of the Russell 1000 Index. Each stock’s potential growth prospects have improved to neutral or positive. Citi research predicts earnings forecasts of 5% or less for 2024 and 2025. Each stock is recommended as a buy. iPhone maker Apple was included in Citi’s list. Its shares rose more than 10% in 2024 but have fallen more than 6% in the past month due to pressure across the tech sector. Apple also took a hit this week, as Warren Buffett’s Berkshire Hathaway revealed that it had cut its stake in the tech giant by nearly half in the second quarter. Indeed, several analysts see this as a buying opportunity. AAPL Apple shares up 3% year to date. Caterpillar was also cut. The construction equipment maker is up more than 12% in 2024. On Tuesday, shares were boosted by better-than-expected second-quarter results, up 3%. Indeed, analysts are lukewarm on the stock’s outlook. The consensus rating for the stock is Hold, according to LSEG, and the average price target suggests limited upside going forward. Home Depot was also among the names cut. Home improvement stocks have underperformed the broader market in 2024 as rising interest rates have slowed demand for large projects and big-ticket items. Year to date, shares have been flat. But traders are predicting a nearly 62% chance of a rate cut at the September FOMC meeting, and Home Depot could benefit from increased consumer refinancing as rates fall. HD YTD Mountain Home Depot Stock. Other stocks on the list include Devon Energy and Zscaler.
Where to go after the market sell-off
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