The stock market has remained highly volatile owing to concerns over high inflation and the Fed’s monetary policy tightening, which many analysts expect to push the economy into a recession. While consumer prices moderated in April and are expected to be flat in May, a healthy labor market is expected to keep the Fed on track to tighten the monetary policy, leading to continued market volatility.
Amid the uncertainties surrounding the economy and the stock market, consumer staples stocks could offer stable returns because of the inelastic demand these companies enjoy. Investors’ interest in consumer staples stocks is evident from the First Trust Consumer Staples AlphaDEX ETF’s (FXG) 4.9% returns over the past three months versus the SPDR S&P 500 Trust ETF’s (SPY) 1.2% loss.
