Morgan Stanley says buy these defensive growth stocks as economy disappoints

by | Sep 18, 2023 | Financial

In an uncertain market environment, Morgan Stanley thinks investors can regain confidence with some large-cap defensive stocks. The firm screened for stocks that have shown relative strength both year-to-date and more recently, in terms of equal weight performance. All are members of the top 1000 by market cap universe, have outperformed on a year-to-date basis, and are classified as a growth stock based on Morgan Stanley’s proprietary factor classification model. Also, each of the companies are rated overweight by the firm. “In the absence of more definitive data around the remaining duration of the business cycle, we think the market will trade in a ‘late cycle’ manner,” said analyst Michelle Weaver in a Monday note. “In our view, the best way to express that in a portfolio is to hold a barbell of defensive growth (select growth stories and more traditional defensive sectors like Healthcare and Consumer Staples) with late-cycle cyclicals (Industrials and Energy).” Here are some names from Morgan Stanley’s playbook: McDonald’s is a sure defensive play, according to the firm. Shares of McDonald’s have gained 5.7% so far this year and hovered above flat on Monday, with recent losses this quarter driven by the company’s pushback against a recently passed landmark fast-food bill that raises the wage fl …

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