Since the beginning of 2022, the concerns about the Federal Reserve’s tighter monetary policy to combat high inflation and the Russia-Ukraine war have weighed heavily on investors and pushed the benchmark indices into correction territory. Furthermore, the better-than-expected May employment report fueled the Fed’s commitment to raising interest rates to bring down the inflationary pressure. The Dow Jones Industrial Average (DJIA) index plunged nearly 10% year-to-date.
Even though the market equities enjoyed an uneven rally over the past few weeks, the cyclical DJIA index is expected to decline further amid increasing recession odds. Most CFOs expect the Dow Jones to fall below 30,000, registering a decline of over 18% from its current level. Despite its dim performance and outlook, there are quality stocks with improving fundamentals and solid growth prospects which are outperforming the Dow Jones index.
