The U.S. stock markets have been experiencing fluctuations in early 2024 following a strong rally in 2023. The excitement surrounding technology stocks has diminished as the yield on the benchmark 10-Year U.S. Treasury Note has risen above 4%.
One of the main reasons for this is the uncertainty surrounding the Federal Reserve’s decision on when to make its first cut in the benchmark interest rate. While some key Fed FOMC members believe that the rate hike era is over, they are not yet convinced that the economic conditions are suitable for an immediate rate cut.
Currently, the CME FedWatch tool indicates only an 8.5% probability of the central bank implementing a 25-basis-point rate cut in its March FOMC meeting, compared to over 90% probability at the beginning of the year. Market respondents are predicting that the Fed will maintain the benchmark lending rate at 5.25-5.5% in the May FOMC meeting, with a majority expecting the first rate cut to occur in the June FOMC meeting.
In light of these market conditions, investing in defensive stocks like consumer staples could be a wise strategy to stabilize portfolios in 2024. The consumer staples sector is known for its stability and resilience to economic cycles, as it includes companies that provide essential products for daily use, making it a defensive sector.
Here are five consumer staples stocks with strong growth potential for 2024, each with positive earnings estimate revisions in the last 60 days and either a Zacks Rank #1 (Strong Buy) or 2 (Buy):
– Molson Coors Beverage Co. (TAP) is experiencing a bullish trend due to its strong brand presence and performance across its portfolio. The company’s revitalization plan and premiumization efforts are expected to drive growth in 2024.
– Tyson Foods Inc. (TSN) has been leading market share in retail categories and implementing productivity initiatives. The company’s focus on international expansion and shareholder returns make it a promising pick for the year.
– Lamb Weston Holdings Inc. (LW) is benefiting from effective pricing strategies and operational momentum. The company’s growth drivers include supply-chain productivity improvements and global expansion efforts.
– Colgate-Palmolive Co. (CL) has been seeing strong pricing and revenue growth, with a focus on funding growth and productivity. The company’s organic sales growth and revenue management plans have positioned it well for 2024.
– Church & Dwight Co. Inc. (CHD) has been capitalizing on consumer demand for its brands through innovation and acquisitions. The company’s strong portfolio of household and personal care products, along with efficient pricing strategies, make it a solid choice for investors.
These consumer staples stocks offer growth potential and stability in uncertain market conditions. Investors can consider adding them to their portfolios for the year ahead.