While the economy contracted for two consecutive quarters, the momentum of the services sector and strong job growth in July could cool off the current recessionary concerns. However, the strong data could encourage the Fed to consider more extensive rate hikes, eliminating the possibility of a soft landing.
With inflation reports due this week, the markets will likely remain volatile in the near term. While July's Consumer Price Index (CPI) is expected to decline marginally, analysts do not expect the reading to bring any significant relief. So, it could be wise to seek shelter under dividend-paying stocks with solid fundamentals to cushion your portfolios against the potential market volatility.
