Concerns over the Federal Reserve's efforts to combat the multi-decade high inflation by policy tightening leading to a recession in the U.S. economy have led to a massive stock market sell-off lately. The S&P 500 is down 19% from its previous record on January 3. Many analysts believe that the index is in a bear market. According to a recent revelation from Deutsche Bank's chief U.S. equity and global strategist, Binky Chadha, S&P 500 could slide down to 3,000 if the economy falls into a recession in the near future, which would amount to an estimated 23% drop from the index's present level of around 3,900.
Moreover, the U.S. economy saw a 1.4% negative GDP in the first quarter of 2022, largely due to prolonged supply-side constraints, rising energy prices, and the war between Ukraine and Russia. Against this backdrop, investors could consider investing in stalwarts stocks, which represent well-established companies with solid cash flow and earnings growth and offer steady long-term gains.
