Markets ended the week on a positive note on Friday, ending sharply higher after some economic data raised the possibility of a slower pace of rate hikes from the Federal Reserve.
The blue chips Dow Jones Industrial Average climbed 2.6% to end at 32,861, while the wider S&P500 jumped 2.5% to 3,901. The tech-heavy Nasdaq Compound jumped 2.9% to end at 11,102.
Friday’s session ended a tumultuous week of mixed trading on an upbeat note, fueled by disappointing quarterly reports from many of the biggest tech companies. Friday was from Amazon.com (AMZN (opens in a new tab), -6.8%) plunged as shares fell after the e-commerce and cloud computing giant announced a pessimistic revenue forecast for the holiday shopping season. ParentGoogle Alphabet (GOOGL (opens in a new tab)), parent Facebook Metaplatforms (META (opens in a new tab)) and Microsoft (MSFT (opens in a new tab)) all delivered discouraging results earlier in the week.
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But Friday’s action was dominated by a better than expected reading on inflation. The core personal consumption expenditure index, which is the Fed’s preferred measure of inflation, gained 0.5% month over month in September. The figure was just below economists’ expectations and fueled hopes that the central bank could slow its pace of raising interest rates.
The best healthcare stocks to buy
A slowdown in the pace of inflation is to be expected if the economy is truly headed for a slowdown, and that only reinforces the case for stocks holding up well in a bear market. Although the initial reading of the third quarter gross domestic product reached an annual rate of 2.6% better than expected (opens in a new tab) – and rebounded after two consecutive quarters of contraction – experts say the underlying data reveals a increasingly weak economy (opens in a new tab). Should this be the case, investors would be well advised to adopt strategies that work in a bear market (opens in a new tab). To add reliable and rising dividend payers (opens in a new tab) to a portfolio can certainly help people’s returns hold up in bear markets, especially when those names are concentrated in defensive sectors. The best consumer staple stocks (opens in a new tab) are a good starting point.
But few sectors are as dividend-rich and defensive as healthcare. The driving narrative for the past few years has been the industry’s response to COVID-19, and some of those tailwinds are starting to ease. We found several healthcare stocks set to reach new heights (opens in a new tab) as the pandemic continues to ebb.