The market has been on a downward trend for weeks now. As a result, investors are starting to sell quality companies along with lower quality ones creating buying opportunities. This past week was tough for retailers after Walmart (WMT) and Target (TGT) reported weak earnings and reduced guidance for 2022. In response, the Dow Jones Industrial Average (DJIA) had its worst day since 2020, down 1,200 points. However, all indices are down, and there are deals to be had, but investors should focus on quality. We discuss 3 stocks to buy in the market carnage: Costco Wholesale Corporation (COST), International Business Machines Corporation (IBM), and 3M Company (MMM).
First, we summarize the status of the market. The Nasdaq and Russell 2000 are technically in a bear market, down roughly (-26.9%) and (-20.7%). Even after Wednesday’s difficult day, the S&P 500 Index is in a correction. The chart below shows that only the FTSE 100 is up, likely because of its commodity stocks. From a sector perspective, only Energy stocks have done well, with Utilities breaking even.
The drivers of the market decline are arguably the highest inflation in about four decades; the U.S. Federal Reserve conducting tapering, raising interest rates, and reducing its balance sheet; the conflict in Ukraine; extensive COVID-19 related shutdowns in China affecting supply chains; and secondary effects from the crash in cryptocurrencies. If the combined result was not a perfect storm for stocks, it is close.
In any case, some quality stocks are trading at valuations not seen since early 2020.
3 Stocks to Buy in the Market Carnage
The first stock on our list is Costco, the warehouse retailer. In less than a month, the stock price has dropped from an all-time high of ~$612 to ~$421 per share…
International Business Machines has been a stock most people love to hate in the past decade. However, I have written positively about it for a couple of years, especially since the acquisition of Red Hat in 2019…
The third and last stock on this list is 3M Company, the industrial conglomerate. 3M is a supplier to other manufacturers and sells consumer products. Major well-known brands include Scotch, Scotch-Brite, Post-it, Ace, Nexcare, and Filtrete…
Please read the complete article at my profile on Seeking Alpha for 3 Stocks to Buy in the Market Carnage.
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