Not All Stocks Are Created Equal

The Weekend Edition is pulled from the daily Stansberry Digest.

Take your pick of what leading indicator you want to use...

The U.S. economy is on its way to an "official" recession.

On Thursday, the U.S. government published its first crack at the first-quarter gross domestic product ("GDP"). It showed 1.1% annualized growth. That's barely half of what many mainstream economists were expecting... and well below the 2.6% annualized growth in the fourth quarter of 2022.

As global news service Reuters reported, inventory reductions made up a big chunk of the decline. U.S. businesses are bracing for an economic slowdown in the rest of the year...

Private inventory investment declined at a $1.6 billion pace, the first decrease since the third quarter of 2021. The drop, led by wholesalers and manufacturers, followed a $136.5 billion rate of increase in the fourth quarter...

Inventories chopped off 2.26 percentage points from GDP growth, the most in two years, after adding 1.47 percentage points in the prior quarter. Business spending on equipment contracted for a second straight quarter.

Residential real estate investments – meaning homebuilding, remodeling, and mortgage activity – also slowed for the eighth straight quarter.

Add this report to the pile of concerns...

As we reported in DailyWealth last week, Americans have been spending less and less money lately... The Federal Reserve economists are even warning of a likely "mild" recession now. Small businesses are increasingly becoming less inclined to hire people...

And large businesses are making mainstream headlines by laying people off.

One of those companies that recently cut costs by cutting employees is fast-food giant McDonald's (MCD). It reported its quarterly earnings this week... And, among other things, management said it was preparing the business for a recession.

As our Stansberry NewsWire's Kevin Sanford reported on Thursday, the company's CEO said customers are starting to order fewer items. What's more, in certain markets, folks are starting to push back against higher prices the company had been passing along to customers in the past two years.

At this point, even if a recession is never deemed "here," enough people are behaving like one is coming to make it a self-fulfilling prophecy. And it's all in the name of killing 40-year-high inflation... And the Fed probably won't even succeed in beating down inflation if it "cries uncle" early amid rising unemployment.

As for stocks...

The markets have bounced back from a two-day slide. Tech giant Meta Platforms (META) saw a 14% gain after its earnings release, which included beefing up its second-quarter outlook. That helped drive a rally in the S&P 500 Index.

The benchmark index remains below its most recent highs from earlier this year... But it's trading just above its 50-day moving average, higher than its 200-day moving average, and about 15% higher than its lows back in October.

Yet there are risks ahead to consider... namely, the impacts of a recession on prices of stocks and other assets.

What to do?...

I have heard from a few people recently who feel like they don't know what to do when it comes to growing their wealth today. And they're not alone.

As we also reported recently in the Stansberry Digest, a lot of folks have parked relatively extreme amounts of cash on the sidelines. They're not invested in anything while 5% inflation (or even higher, depending on how you measure it) eats away at their net worth.

At the very least, short-term Treasury bills are a good option to consider for your cash... as are high-quality, dividend-paying stocks that will reward you with more shares even in a downturn.

But what if you're searching for new buys today?

In stocks, I think the main question for most people is this: Is the recession entirely "priced in," or is there more downside ahead? History suggests there should be some more downside ahead for the broader markets before a new bull run begins.

Yet not all stocks are created equal, either. We saw this throughout 2022 as some once-popular names dropped 80% or more... while others were off less than 20%... and some, like Hershey (HSY), were even up while the S&P 500 was down double digits.

And we're seeing it this year, too. I doubt most people are aware that six of the 11 major S&P 500 sectors are down over the past three months, but that tech stocks are up 9% and consumer staples are up 5%.

To this point, don't forget your "blind spots"...

Yes, some more rocky waters may be ahead. But some stocks have already tanked way more than others over the past year-plus. That makes their risk-reward balance a little more palatable, even with leading indicators flashing warning signs about the economy...

Some people may get lucky over a short period of time without considering risk. But as any long-term investor will tell you, managing the upside versus the downside of any investment is crucial.

If you have cash on hand today and you're searching for opportunities to buy, one of our longest-tenured analysts says there is only one place to look... a large market sector that typically gets overlooked or misunderstood.

I can't give too much away here, but Stansberry Research senior analyst Bryan Beach just released a compelling presentation with all the details. And just know that he doesn't do this kind of thing very often...

In fact, this presentation is only the second time Bryan has agreed to make a special on-camera appearance in his 11 years with Stansberry Research. On top of that, he has only spoken publicly a handful of times, almost exclusively in front of Stansberry Alliance members.

But with so many people stuck when it comes to growing their wealth right now, Bryan is coming forward to spread the word about this "blind spot" that he thinks millions of people will miss. He doesn't want Stansberry Research readers to be among them.

A message we want you to hear...

As Bryan, the longtime editor of Stansberry Venture Value and part of the team behind our flagship Stansberry's Investment Advisory, says...

I know full well that people are hitting a point of mental exhaustion when it comes to figuring out how to grow their money... now and for the future. But I believe what we're here to talk about could end up giving them a very smart and very lucrative option for what to do next.

As Bryan explains in the presentation, this is a sector of the market that's already cheaper than most. It has led stocks out of every bear market in the past 90 years... And it has individual names within it that present tremendous buying opportunities today.

For investors who act accordingly, Bryan says they could potentially lead to a run of triple-digit returns... the likes of which we haven't seen since the beginning of the historic bull run that lasted from 2009 until 2020.

If you haven't seen it yet, click here to get all the details, including how to access Bryan's top opportunities, a free year of his work, and – just for tuning in – a free recommendation on the small, overlooked company that he says could double your money over the next year or two.

Good investing,

Corey McLaughlin

Editor's note: With the mainstream media gloom, investors are falling prey to a major blind spot today. It's tough to see where the true value is in the market. That's why our colleague Bryan Beach is pulling back the curtain... to show the general public one of the greatest value opportunities Wall Street has seen in almost 15 years.

This class of companies is trading at its lowest valuations since the 2008 financial crisis. And the last time we saw a setup like this, these stocks delivered gains of more than 400% across the board. But this incredible value won't last long... Click here to get the full story