Because the chance of a tough touchdown this 12 months rises, Barclays says buyers ought to search high quality shares that aren’t overly costly. Giant-cap tech shares have been outperforming the market in 2023, with the S & P 500’s tech sector up greater than 16%. Nevertheless, Venu Krishna, Barclays’ head of U.S. fairness technique, warned towards following this pattern, citing elevated valuations, in addition to inflation and rate of interest dangers. “Moderately than chasing one more crowded commerce that’s susceptible to the following unwind, we advocate in search of secure haven amongst high quality shares at much less demanding valuations,” Krishna wrote in a report on Monday. With the rising market uncertainty in thoughts, Barclays really useful a basket of high quality shares buying and selling at decrease valuations as a method to place for the rising danger of an financial downturn this 12 months. Check out a few of the names beneath: Well being-care large Johnson & Johnson made Barclays’ checklist. Shares have fallen 13% in 2023. The inventory is considered one of eight names within the S & P 500 to have raised annual dividends persistently over the previous 60 years. Barclays additionally highlighted Merck as a high quality identify that is low-cost. The pharmaceutical firm is a notable winner within the Dow for the reason that Federal Reserve started its newest rate-hike cycle . Shares are down greater than 3% this 12 months. About 7 out of 10 analysts masking Merck price it a purchase or are obese on the inventory, in accordance with FactSet. They see upside of practically 13%. Industrial names United Postal Service and 3M had been additionally chosen as secure picks for a possible onerous touchdown. UPS shares are up greater than 7% in 2023, and the inventory is a notable dividend increaser among the many S & P 500 . In the meantime, 3M is down greater than 15% this 12 months. Analysts see upside of 14% from right here, in accordance with FactSet. A number of tech shares made the checklist, together with Microsoft and Accenture . Microsoft shares have gained 15% in 2023. Greater than 8 out of 10 analysts masking the inventory price it a purchase, in accordance with FactSet. The tech large’s shares have been boosted by the current growth in synthetic intelligence . Accenture was a high performer within the prior buying and selling week after the corporate introduced it will lay off about 2.5% of its workforce , or 19,000 jobs. Shares are up greater than 2% in 2023, and analysts see upside of greater than 13%, in accordance with FactSet. —CNBC’s Michael Bloom contributed to this report.
