The stock market has been under immense pressure lately amid growing concerns over multi-decade high inflation, the Fed’s hawkish tilt, ongoing geopolitical crisis, and the possibility of the U.S. economy sliding into a recession. Yesterday, Fed increased its benchmark interest rate by 75 basis points, the highest hike since 1994. Furthermore, officials slashed their outlook for 2022 economic growth, expecting just a 1.7% rise in GDP, down from prior guidance of 2.8%. These factors are expected to keep the stock market highly volatile in the coming months.
Amid the risk-off environment, consumer staples, including grocery stocks, can offer steady growth, low volatility, and boost portfolio diversification. Grocery stocks are known for providing a solid defense against market correction due to inelastic demand for their products. Moreover, investors can capitalize on high costs being passed on to consumers amid inflated grocery prices.
