For the stocks to buy this week, investors may need to consider a strategy shift. Last Friday, the Labor Department released the employment situation for the prior month. In the key report, the U.S. economy added 263,000 jobs, signifying robust strength. Ordinarily, this dynamic would be encouraging. However, the dramatic expansion of the money supply puts the Federal Reserve in a quandary.
Essentially, the central bank realized that for all the aggressive interest rate hikes throughout 2022, it did jack squat. The labor market continues to run red hot, meaning that more dollars will chase after fewer goods. Naturally, the Fed wants the opposite circumstance to ring true, suggesting more rate hikes in 2023. That’s going to change the narrative for stocks to buy this week.
With the incredibly robust November jobs report complicating the broader narrative, investors ought to target insurance carrier Progressive (NYSE:PGR) as one of the stocks to buy this week. Per its public profile, Progressive represents the third-largest insurance carrier and the No. 1 commercial auto insurer in the nation. Put another way, people can’t escape from its underlying relevance.
PGR ranks as one of the stocks to buy this week for two fundamental reasons. First, the underlying company enjoys inelastic demand. Per Progressive’s website, nearly every state requires auto insurance. To be sure, some rare exceptions exist. However, given how the roads have always been chaotic, it just makes sense to own financial protection.
Second and speaking of chaos, the pandemic appears to have made American drivers more recklessly. That’s according to the Los Angeles Times, which reported on the rise in auto-related fatalities. To put it simply, it’s wild out there. Progressive can provide some reassurances, supporting PGR’s case as one of the stocks to buy this week.
With the Fed likely to raise interest rates to combat stubbornly high inflation, few sectors offer a reliable place for protection and possible upside. However, one of the viable industries is insurance. I don’t mean to harp on this sector, but when faced with harsh conditions, you got to go with what works. Therefore, as one of the stocks to buy this week, I’m sticking with Aflac (NYSE:AFL).
A specialist in the supplemental insurance arena, Aflac plugs gaps found in traditional protection packages. For instance, the brand enjoys significant recognition for its payroll deduction insurance coverage, which pays cash benefits when a policyholder has a covered accident or illness. As we all know now, the smelly stuff can hit the proverbial fan at any time.
Aflac simply makes sense in the post-pandemic environment, making AFL one of the stocks to buy this week.
Another factor to consider is the direct correlation between rising rates and insurance firm valuations. Generally speaking, as interest rates rise, so too do insurance stocks.
Johnson & Johnson (JNJ)
Investors interested in stocks to buy this week not wholly related to the insurance industry should check out Johnson & Johnson (NYSE:JNJ). Presently, the enterprise develops medical devices, pharmaceuticals and consumer packaged goods. With myriad relevant revenue generators at its disposal, the company can ride out economic headwinds.
In addition, when events erupt that jeopardize public health, Johnson & Johnson could become a relevant player. For instance, NPR recently reported that a “tripledemic” translates to certain over-the-counter medicines like ibuprofen being difficult to find. Naturally, this and potential other incidents in the future can drive critical demand for JNJ.
As well, Johnson & Johnson may appeal as one of the stocks to buy this week because of its forward yield of 2.56%. No, it’s not a particularly large yield if we’re keeping it real. However, the company commands 60 years of consecutive dividend increases, a status management won’t give up easily.
Duke Energy (DUK)
Headquartered in Charlotte, North Carolina, Duke Energy (NYSE:DUK) is an electric power and natural gas holding firm. Its electric utilities serve 8.2 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky. On a year-to-date basis, DUK shed nearly 4% of equity value. While in negative territory, it’s conspicuously improved in recent sessions.
Fundamentally, as I’ve mentioned before, Duke benefits from migration trends. For instance, its home state of North Carolina represents an attractive region for young people. More recently, a local newspaper noted that millennials have begun flocking to Raleigh. While Duke will always make money, it’s also positioned to take advantage of demographic growth.
As well, investors should consider DUK as one of the stocks to buy this week for its passive income. Per Dividend.com, the company offers a forward yield of 4%. This ranks higher than the sector average yield of 3.75%. Additionally, the company features 17 years of consecutive dividend increases, a status management will want to keep.
At a cursory level, midstream player Enbridge (NYSE:ENB) might appear a challenging idea for stocks to buy this week. Politically and ideologically, the broader narrative pivoted toward alternative energy solutions. As well, sales of electric vehicles boomed this year, presenting longer-term relevancy concerns.
However, keep in mind that the national power grid may be suspect. For instance, if California struggled to handle the heat wave earlier this year, a full transition to EVs appears unrealistic.
In the meantime, Enbridge offers a readymade solution right now. Per its website, “Enbridge operates the world’s longest and most complex crude oil and liquids transportation system.” This includes 17,809 miles of active crude pipeline across North America.
Also, other interesting facts include Enbridge accounting for 40% of total U.S. crude oil imports. As well, the company transports about 20% of all natural gas consumed in the U.S. In other words, Enbridge is practically permanently relevant, making it an intriguing idea for stocks to buy this week.
While the bulk of stocks to buy this week focus on defensive market ideas, McDonald’s (NYSE:MCD) may offer some upside within the broader discretionary sector. One of the most iconic American enterprises, McDonald’s benefits from the cheap thrills thesis. Stated differently, the fast-food giant provides a low-cost pick-me-up, which could be socially significant during these rough times.
In addition, normalization trends in the workforce could lift MCD stock. With potentially up to 90% of companies poised to require their employees to return to the office at least part of the week beginning in 2023, McDonald’s could provide a cheap avenue for coffee and breakfast products. In fact, CNBC reported that breakfast sales soared earlier this year as many people returned to their corporate workstations.
Finally, McDonald’s offers an okay dividend with a forward yield of 2.22%. While not particularly high, the company enjoys 45 years of consecutive dividend increases. It’s a status that McDonald’s leadership team will want to maintain if at all possible.
Procter & Gamble (PG)
When faced with troubling economic circumstances, investors should focus their stocks to buy this week on boring enterprises. Frankly, it doesn’t get more boring than Procter & Gamble (NYSE:PG). A household goods giant, the company is almost recession-proof because it offers core necessities. Further, it may take a substantial headwind to force customers to trade down from PG-branded products to something cheaper.
To be fair, PG stock is down 7% on a year-to-date basis. While somewhat of a blight, it wasn’t that long ago that shares were down over 17% YTD. Therefore, investors may be recognizing the company’s resilience, making it one of the stocks to buy this week.
Further, the company pays a forward yield of 2.41%. While not the most generous source of passive income, here’s the deal: Procter & Gamble has 66 years of consecutive dividend increases. Believe me, management will not let that simply fade without good reason.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.