The markets stay in a decent buying and selling vary amid blended inflation knowledge and a slowdown within the variety of earnings being reported final week. With the bulls searching for a smooth touchdown because the Fed pauses their charge hike marketing campaign, the bears are fearing a extra harsh recession as a consequence of sticky inflation and the latest tightening of credit score.

As you possibly can see within the chart beneath, we have been in a buying and selling vary for the previous six weeks and, with April’s important inflation experiences now behind us and earnings season really fizzling out, we might properly stay on this vary till at the least the Federal Reserve’s subsequent charge resolution on June 14th and, extra probably, properly into the 2nd half of the yr.

DAILY CHART OF S&P 500 INDEX

Right now, the Fed has forecasted a light recession; nevertheless, main CEOs comparable to JPMorgan (JPM) head Jamie Dimon and billionaire Stan Druckenmiller are looking out for one thing far more harsh. Their causes for an imminent financial downturn? Greater rates of interest and tightening of credit score. Final week, N.Y. Fed President Daly relayed that there are already indicators of diminished lending amongst regional banks.

One technique to guard towards the potential for a downturn within the financial system, and therefore the markets, is to broaden your portfolio to incorporate dividend-paying shares. Along with offering a stable–mostly quarterly–cash movement, these shares usually show to outperform friends that do not supply a payout.

Right here is one excessive dividend producing inventory and one ETF that may assist counterbalance any downturn as a consequence of a weaker-than-expected financial system. First up is iShares MSCI Brazil ETF (EWZ), which entered an uptrend late final week after the nation reported that inflation dropped to 4.7% in March, which places the speed inside 1.5% of their goal charge. As well as, it is forecasted that Brazil’s central financial institution might start chopping rates of interest within the second half of this yr. And whereas a rising greenback might harm the prospects for this commodity-rich nation, final week’s uptick within the U.S. greenback didn’t have an effect.

DAILY CHART OF ISHARES BRAZIL ETF (EWZ)

EWZ affords a 11.85% yield and this ETF broke out of a 1-month base on heavy quantity final week, with the MACD posting a optimistic crossover. Whereas EWZ is in an uptrend, the ETF is prolonged following final week’s positive factors and patrons might wish to look forward to a pullback to the $29.3 vary as an entry.

Subsequent up is quick meals franchise firm Wendy’s (WEN) which broke out of a 5-month base final week after reporting earnings that have been forward of estimates. The inventory affords a 4.3% annualized yield, which is much increased than the S&P’s common yield of 1.6%. The corporate additionally reaffirmed ahead steerage of progress going into the rest of this yr in addition to subsequent yr.

DAILY CHART OF WENDY’S CO. (WEN)

Along with rising gross sales, the corporate is quickly accelerating their funding into its digital enterprise after coming into into an settlement with Alphabet (GOOG) to make use of synthetic intelligence to take buyer drive by means of orders. This transfer will scale back prices for Wendy’s whereas bettering their effectivity.

There are different methods to fight the at present lackluster market, comparable to investing in shares which might be in defensive areas of the market however that additionally supply a progress element. Subscribers to my MEM Edge Report will probably be accustomed to this technique, as we have been using it over the previous a number of months with a transfer into choose Healthcare and different shares.

If you would like quick entry to this checklist of shares, use this hyperlink right here so that you will be granted a 4-week trial at a nominal payment. You will additionally obtain twice weekly updates on the broader markets in addition to in depth sector and inventory evaluation.

Have a terrific weekend!

Mary Ellen McGonagle, MEM Funding Analysis