Stock investors have a lot on their plate, and that's not a throwaway line.
Between the in-line jobs number out Friday (164,000 added jobs), the 10% tariffs threats on $300 billion worth of Chinese goods from Trump Thursday, and the hope for more interest rate cuts, it's hard to know what the market should focus on.
Slowing economic growth is almost a sure bet, and investors should be prepared for that, according to Chris Macke, corporate investment strategist.
Regarding whether stock investors are focused on the jobs report, which showed a decline over June's 224,000 net add, "As of right now, no," said Macke.
"But they [investors] will care on Monday.
So right now they're a little distracted." Macke added, "Over the weekend they're going to dig into the numbers.
They're going to see that we had job growth that was in line but wasn't great.
And most importantly, the last three months, the average has been 140,000 jobs created.
That's a far cry from the 223,000 in 2018 -- doesn't mean we're going to recession, but what it means is it's materially slowing it.
The tariff situation doesn't make any of that better." With that backdrop, Macke likes consumer staples, as the U.S. has shown strength.
With the S&P 500 still up 17% year-to-date, economic deceleration and the strong consumer, the low volatility staples are a nice haven for defensive investors, especially those looking for strong dividend yields, many of which are higher than the 10 year treasury's yield of 1.8%.
"Think about food, think about things in your household, think about what you've got in your refrigerator, think about what you've got in your medicine cabinet homes," Macke said.
"I would make the same recommendation to investors focus more on the defensive," he concluded.
Price Action Is Now Confirming the Negative Thesis