The major stock indices are heading for their first weekly gains in three weeks. While investors appear to have digested the Fed’s first interest rate hike this year fairly well, concerns over its planned future interest rate hikes to control surging inflation, and persistent geopolitical tensions, will likely keep the stock market under pressure in the near term.
Wide-moat companies are regarded as having a competitive advantage in the market. These stocks generally perform well when inflation and interest rate concerns peak due to their enhanced ability to pass on price increases and finance growth without heavy borrowings. Furthermore, the valuations of wide-moat stocks have declined recently, which could be an opportunity for investors to scoop them up.
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