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<ul class="summary-list"><li>Analysts are increasingly recommending defensive stocks to blunt the impact of an economic slowdown.</li><li>Among defensive sectors, consumer staples have risen sharply recently. </li></ul>Amid fears of a recession and increased market volatility, analysts have been pointing to defensive stocks as a safe bet to hedge macro risk.Among defensive sectors — which include things like real estate and financials — investors recently have been pouring into consumer staples in particular.The S&amp;P 500's consumer staples sector has risen roughly 4.1% in the last month, handily outpacing the S&amp;P 500, which is up just over 1% in that time.Retailers like Walmart and Target have skyrocketed 9.2% and 5.7% respectively in the last month, while consumer goods producers like Clorox and Coca-Cola are up 11.2% and 4.5%."The US consumer is reacting to the softer labor market, exhausted pandemic savings, and high interest rates. Signs of this reaction are visible across many angles, including the degree of outperformance in staples versus discretionary stocks," Bank of America strategists said in a note earlier this month.Defensive stocks historically do well in times of economic uncertainty, which has led to <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/safe-defensive-stocks-ai-investing-rally-nvidia-semiconductors-selloff-outlook-2024-9">a growing chorus of analysts </a>recommending investors take positions in more "boring" companies, and resist the allure of high-flying bets on things like artificial intelligence."Lately, the market has skewed much more defensively as it has worried more about growth and less about high inflation or rates," Morgan Stanley's chief US equity strategist Mike Wilson said in a Monday note."Since the spring, the relative performance of defensives over cyclicals has been the strongest since the last recession ended," he added.Last week, Wilson said investors should <a target="_blank" href="https://markets.businessinsider.com/news/stocks/ai-stocks-overcooked-nvidia-seminconductors-morgan-stanley-mike-wilson-2024-9?_gl=1*1uze75i*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTcyNjU3MzcyNC4xNDcuMS4xNzI2NTc4MTEzLjUwLjAuMA..">reallocate AI investments</a> toward quality defensive stocks, including staples.That redirection could broaden a market rally that's been largely driven by tech stocks this year. The S&amp;P Global Semiconductor Index is down 6.26% for the month, with the tech sector seeing outflows of $2.97 billion in the last two weeks, according to LSEG Lipper data cite by The Financial Times. Consumer staples, meanwhile, have seen $1.43 billion of inflows in the same time period.This week, Bank of America equity strategy chief Savita Subramanian <a target="_blank" href="https://www.businessinsider.com/safe-dividends-bank-america-strategy-chief-savita-subramanian-federal-reserve-2024-9">similarly advocated for defensive stocks</a>."I know this is the most boring call of all time, but sometimes boring is good," Subramanian said in a Bloomberg interview on Monday.With the Federal Reserve likely to finally cut rates at its meeting this week, defensive stocks could be poised for further growth."Defensives tend to outperform cyclicals fairly persistently both before and after the cut," Wilson said.

Investors are pouring into this defensive corner of the stock market amid fears of an economic slowdown

<ul class="summary-list"><li>US stocks rose 1% as September jobs report eased fears of an economic slowdown.</li><li>The US added 254,000 jobs, surpassing estimates. The unemployment rate fell to 4.1%.</li></ul>US stocks surged about 1% on Friday after <a target="_blank" class="" href="https://www.businessinsider.com/september-jobs-report-unemployment-rate-nonfarm-payroll-growth-federal-reserve-2024-10">the September jobs</a> report soothed fears of an economic slowdown.All three major averages closed slightly higher for the week to cap off a four-week winning streak.The US economy added 254,000 jobs last month, well ahead of economist estimates of 150,000 jobs. The strong job gains pushed the unemployment rate lower to 4.1% from 4.2%.The leisure and hospitality sector saw the most job gains in September at 78,000, followed by health care, which added about 72,000 jobs, while government jobs rose by 31,000.Economists were mostly thrilled with the jobs report, with many arguing that the decline in the unemployment rate while inflation has continued to trend lower was evidence of productivity gains."The fact that inflation is easing at the same time means productivity growth is strong, and that should keep the Fed on track for more rate cuts — an added tailwind for the economy and markets," Carson Group strategist Sonu Varghese told Business Insider.In terms of future rate cuts, the <a target="_blank" class="" href="https://www.businessinsider.com/september-jobs-report-fed-rate-cut-outlook-november-labor-market-2024-10">market slashed its expectations of another jumbo 50 basis point cut</a> at the Federal Reserve's next FOMC meeting in November.According to the CME FedWatch Tool, odds of a 50-basis point cut dropped to 0% from 53% last week. Consensus now expects two 25-basis point rate cuts from the Fed at their next two FOMC meetings before year-end."This solid payroll report validates an potential half point reduction in fed funds was completely unwarranted. Fed funds futures market is responding accordingly," LPL Financial chief economist Jeffrey Roach said.ING's chief economist, James Knightley, said the jobs report was "unambiguously strong.""On the face of this the Fed should be hiking rates with these sorts of figures, not cutting rates," Knightley said in a note on Friday.Here's where US indexes stood shortly at the 4:00 p.m. closing bell on Friday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,751.07, up 0.9% </li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 42,352.75, up 0.81% (_341.16 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 18,137.85, up 1.22% </li></ul>Here's what else happened today:<ul><li><a target="_blank" class="" href="https://www.businessinsider.com/spirit-airlines-chapter-11-bankruptcy-billion-debt-restructuring-2024-10">Spirit Airlines stock plunged after a report said it was considering filing for Chapter 11 bankruptcy protection.</a></li><li><a target="_blank" class="" href="https://www.businessinsider.com/september-jobs-payroll-report-fed-rate-cut-outlook-labor-market-2024-10">Why one firm is skeptical about the blockbuster jobs report and is still expecting another jumbo rate cut.</a></li><li><a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-ukraine-war-outlook-moscow-sanctions-west-firms-uchicago-2024-10">Russia is facing a 'time bomb' at the heart of its economy amid its ongoing war with Ukraine, an economist said.</a></li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/costco-starts-selling-platinum-bars-gold-silver-retail-success-2024-10">Costco is selling platinum bars for $1,090 as it diversifies its booming precious-metals business.</a></li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/nvidia-stock-price-jensen-huang-blackwell-gpu-demand-ai-tech-2024-10">Nvidia stock moved higher after CEO Jensen Huang said demand for its next-generation GPU chip was "insane."</a></li></ul>In commodities, bonds, and crypto:<ul><li><a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">West Texas Intermediate</a> crude oil was up 1.00% to $74.45 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, was higher by 0.55% to $78.05 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> was down 0.39% to $2,668.80 an ounce.</li><li>The 10-year Treasury yield was higher by 13 basis points at 3.98%.</li><li><a target="_blank" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> was higher by 2.59% to $62,320. </li></ul>

Stock market today: US stocks notch 4-week win streak after strong jobs report eases fears of an economic slowdown

<ul class="summary-list"><li>The first-quarter GDP report surprised investors with disappointing growth, while consumer prices kept rising.</li><li>The provides the backdrop for stagflation, which can't be combated with rate cuts.</li></ul>The latest GDP and inflation readings were what investors were least eager to see, and could hint at serious trouble ahead. "This was a worst of both worlds report – slower than expected growth, higher than expected inflation," wrote David Donabedian, chief investment officer of CIBC Private Wealth US. First-quarter growth fell well behind estimates, rising at an <a href="https://www.businessinsider.com/gdp-gross-domestic-product-first-quarter-economy-growth-2024-4?utm_medium=ingest&amp;utm_source=markets&amp;_gl=1*1c405xn*_ga*MTMxNDIwNDI1Ni4xNjc1Njg3OTU4*_ga_E21CV80ZCZ*MTcxNDA1Mjk4My4zNDMuMS4xNzE0MDYwODk5LjYwLjAuMA..">annualized rate of 1.6%</a>, according to the <a href="https://www.bea.gov/data/gdp/gross-domestic-product" target="_blank">Bureau of Economic Analysis</a>. Not only is that far under forecasts of 2.5%, but it also fails to live up to the 3.4% increase achieved in the fourth quarter. While such a cooldown would usually bolster calls for interest rates to start easing, the report noted a hotter-than-expected rise in consumer prices as well. That puts serious limits on the Federal Reserve's ability to take action, as the central bank has made clear it needs inflation to climb lower before any rate cuts can happen. Stocks — which have long priced in those cuts — <a href="https://markets.businessinsider.com/news/stocks/stock-market-today-q1-gdp-sp500-earnings-meta-microsoft-alphabet-2024-4" target="_blank">sold off sharply</a>. It's also bad news for the economy, as sputtering growth and higher prices are the key ingredients for stagflation, which is characterized by economic listlessness and stubbornly elevated inflation over a prolonged period. Such a scenario that can be even harder to combat than a <keyword id="6357558" type="General" weightage="20" keywordseo="recession" source="Orion">recession</keyword>, because of the dynamic outlined above: the Fed's hands are largely tied. America's last dalliance with stagflation came in the 1970s. The precedent can offer a glimpse into how the US economic picture could unfold, and makes it clear why economists are desperate to avoid a re-run. Early that decade, geopolitical disagreement prompted the OPEC coalition to restrict crude exports to the US, and energy <a href="https://cepr.org/voxeu/columns/wage-price-spirals-historical-evidence" target="_blank">prices rocketed</a> in response. With additional help from high government spending and the <a href="https://www.businessinsider.com/today-is-the-40th-anniversary-of-nixon-ending-the-gold-standard-2011-8">dollar's de-coupling from gold</a>, inflation surged into double digits, while the economy <a href="https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions" target="_blank">tumbled</a>. The period was so tumultuous that it undid long-standing <a href="https://www.businessinsider.in/investment/news/keynesian-economics-a-depression-era-idea-thats-seen-a-resurgence-in-the-21st-century/articleshow/87594974.cms" target="_blank">macroeconomic theories</a>, and required the Fed to step up its role in the economy. In order to finally reign things in, then-Fed Chairman Paul Volcker was forced to raise interest rates a staggering 20%, calming price highs but throwing the US into a deep recession. It's for this reason current analysts <a href="https://www.businessinsider.com/what-is-stagflation-explained-oil-outlook-low-growth-high-inflation-2021-10">shudder at comparisons</a> to the period 50 years ago, and why stagflationary forecasts bear weight. JPMorgan's Jamie Dimon is among those who have recently made allusions to the stagflationary 1970s, warning that markets have become too cheerful about the state of the economy. "I worry it looks more like the '70s than we've seen before," the prominent bank chief <a href="https://fortune.com/2024/04/24/jpmorgan-jamie-dimon-economy-1970-stagflation-fear/" target="_blank">said at the Economic Club of New York</a> last week. His point — one he's asserted <a href="https://www.businessinsider.com/jamie-dimon-jpmorgan-economy-looking-like-1970s-stagflation-inflation-rates-2024-1?utm_medium=ingest&amp;utm_source=markets&amp;_gl=1*1v016fo*_ga*MTMxNDIwNDI1Ni4xNjc1Njg3OTU4*_ga_E21CV80ZCZ*MTcxNDA1Mjk4My4zNDMuMS4xNzE0MDY3NDAzLjI2LjAuMA..">on multiple occasions</a> — comes from the fact that fiscal spending has once again exploded, while the economy is poised to bear a number of inflation-drivers: from <a href="https://www.businessinsider.com/jamie-dimon-soft-landing-outlook-recession-inflation-jpmorgan-geopolitics-2024-4">green industrialization to global remilitarization</a>. But stagflation remains a long shot. Despite sticky-high inflation, markets continue to price in at least one rate cut this year. Further, Barclays analysts led by Pooja Sriram pointed out after the GDP report that final sales to domestic purchasers rose by enough to suggest "demand conditions remain strong." Friday's personal consumption expenditures report — viewed as the Fed's main inflation bellwether — will offer investors a clearer picture of where inflation is headed. If it goes higher, the Fed will have little choice but to become more tighten policy, according to Donabedian. "We are not far from all rate cuts being backed out of investor expectations. It forces Chair Powell into a hawkish tone for next week's FOMC meeting," he said.

The US economy may be barrelling towards stagflation, an outcome worse than recession

<ul class="summary-list"><li>The International Monetary Fund raised its growth forecast for the US economy to 2.8% this year.</li><li>It expects slower growth of 2.2% next year as the government cuts back and the job market cools.</li></ul>The International Monetary Fund raised its growth forecast for the US, projecting the world's largest economy would expand by 2.8% this year instead of the 2.6% it predicted in July.in its latest <a target="_blank" class="" href="https://www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024">World Economic Outlook </a>released on Tuesday, IMF staff cited stronger consumption fueled by "robust increases in real wages" and wealth effects, along with non-residential investment, as the two main reasons for the increase. However, they predicted GDP growth would slow to 2.2% in 2025 as the US government curbs its spending and the labor market cools, sapping consumption.The IMF projected global growth of 3.2% in both 2024 and 2025, virtually unchanged from its previous prediction. They underscored their latest forecast for global growth over the next five years of 3.1% was "mediocre" compared with the pre-pandemic average."Persistent structural headwinds — such as population aging and weak productivity — are holding back potential growth in many economies," the agency's staff wrote.They projected only a slight slowdown in China to 4.8% this year due to resilient net exports, and revised their April forecast for 2025 upward by 0.4 percentage points to 4.5%. They noted the Chinese government's stimulus measures "may provide upside risk to near-term growth."The UN financial agency said that growth in the euro area appears to have troughed in 2023, and it anticipates an acceleration to 0.8% expansion in 2024 driven by stronger exports, then 1.2% in 2025 on the back of improved domestic demand.IMF staff made downward revisions to its growth outlook for the Middle East, Central Asia, and sub-Saharan Africa, citing disruptions to the production and shipping of oil and other commodities as well as "conflicts, civil unrest, and extreme weather events."In contrast, they upgraded their April forecasts for emerging and developing Asia by 0.3 percentage points for both 2024 and 2025, to 5.4% and 5.0%. They cited "surging demand for semiconductors and electronics, driven by significant investments in artificial intelligence, has bolstered growth."

The IMF just raised its growth forecast for the US economy this year — but expects a slowdown in 2025

<ul class="summary-list"><li>China's oil demand growth has slowed this year.</li><li>That's due to China's big shift to EVs and natural gas, Goldman Sachs analysts said. </li></ul>Oil demand in China has slowed markedly this year amid the country's shift to electric vehicles and natural gas, Goldman Sachs analysts said.The firm estimates that oil demand growth in the country is down to 200,000 barrels per day for 2024 compared to last year, with overall consumption down by 300,000 barrels a day. The shift from gas-fueled cars to electric and hybrid vehicles alone has reduced demand by 500,000 barrels a day, the analysts said. China's EV sector has expanded rapidly, with three of its biggest electric car makers <a target="_blank" href="https://www.businessinsider.com/chinese-electric-vehicles-byd-selling-record-cars-tesla-competition-deliveries-2024-7">hitting record sales in June</a>. A <a target="_blank" href="https://www.businessinsider.com/chinese-ev-makers-outpacing-tesla-in-one-key-area-2024-7">report</a> from last month finds Chinese EV companies are catching up to — and even beating — industry leader Tesla when it comes to innovation.In an earlier report, the analysts predicted the surge in electric and hybrid sales will cause China's road oil consumption to peak in 2025, years ahead of most emerging market economies.The analysts say the oil demand slowdown also indicates broader concerns around China's dependence on manufacturing."While oil data now send a too pessimistic message about China economic activity (fuel switching does not lower GDP), overcapacity highlights the fragility of China's manufacturing bet," the analysts wrote.The oil slowdown comes as China's economy faces a slowdown across the board, with a <a target="_blank" href="https://www.businessinsider.com/china-economy-housing-market-real-estate-crash-investors-outlook-construction-2024-3?utm_medium=ingest&amp;utm_source=markets&amp;_gl=1*1i3p3gk*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTcyNDE3MTUxMi41My4wLjE3MjQxNzE1MTQuNTguMC4w">struggling property sector</a> and <a target="_blank" href="https://www.businessinsider.com/china-economy-weak-domestic-demand-factory-activity-amid-strong-export-2024-7?utm_medium=ingest&amp;utm_source=markets">weak consumer sentiment</a>.On Monday, the country's two main stock exchanges <a target="_blank" href="https://markets.businessinsider.com/news/stocks/chinese-stocks-sentiment-indicator-flows-foreign-investors-china-economy-2024-8#:~:text=China's%20economy%20is%20facing%20headwinds,first%20half%20of%20the%20year.">stopped reporting daily data</a> on flows from foreign investors, part of a greater move away from reporting real-time data as the <a target="_blank" href="https://www.businessinsider.com/china-economy-growth-consumer-spending-demand-real-estate-debt-crisis-2024-8">economy remains stuck in a rut</a>.

China's EVs are fueling a big oil demand slowdown

The Indian <keyword id="46964" type="General" weightage="20" keywordseo="it-sector" source="Orion">IT sector</keyword>, which has seen contraction in <keyword id="6357342" type="General" weightage="20" keywordseo="hiring" source="Orion">hiring</keyword> amid <keyword id="61483" type="General" weightage="20" keywordseo="global-economic-slowdown" source="Orion">global economic slowdown</keyword> and <keyword id="6412154" type="General" weightage="20" keywordseo="funding-winter" source="Orion">funding winter</keyword>, is likely to witness a positive turnaround with 8-10 per cent increase in hiring in 2024, a new report showed on Wednesday. Overall, the hiring in the IT sector is expected to surge by 12-15 per cent in CY 2024, especially due to the surge in global capabilities centres (GCCs) and global economy settling down comparatively, according to talent solution company NLB Services. "From a quarter perspective, the initial quarter will notice an average 8-10 per cent growth in hiring, followed by Q2 and Q4 demand percentage rising up to 12-14 per cent," said Sachin Alug, CEO, NLB Services. The IT sector has been estimated to have witnessed a growth of 40-45 per cent of jobs in 2023 as compared to 2022. In 2024, hiring is further expected to surge by 15-20 per cent. Owing to global recession and shift in business synergies, the Indian IT sector witnessed a dip during the initial quarters of this year. In fact, in Q1 FY24, IT witnessed the sharpest contraction in headcount in the last three years as companies were experiencing the heat of the <keyword id="29405" type="General" weightage="20" keywordseo="slowdown" source="Orion">slowdown</keyword> in projects, according to the report. "However, the third quarter of this fiscal year is bringing a favourable outlook. Promising prospects are foreseen in green technology, electric vehicles, and an increased emphasis on AI and cybersecurity," Alug informed. In Q2 FY24, the key IT firms reported a 3-10 per cent average increase in their net profits. The positive growth trajectory was largely influenced by IT players securing strong new wins, expanding multi-year renewals with existing clients, and growing investment into technology, etc. "Despite the initial slowdown some of the skill sets which continued to shine in prominence in this segment included software development (with 28 per cent demand), SAP expertise (12 per cent demand), automotive design (14 per cent demand), and testing skills (12 per cent demand). "Some of the most in-demand IT skills next year are expected to include AI/ML experts, DevOps specialists, full-stack developers, cybersecurity experts, Blockchain developers, Cloud architects, UI/UX designers and so on. "Overall hiring in the IT sector is expected to surge by 12-15 per cent in CY 2024, especially due to the surge in global capabilities centres (GCCs) and global economy settling down comparatively," said Alug.

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Investors are pouring into this defensive corner of the stock market amid fears of an economic slowdown

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