Defensive Stocks to Consider Amid Jamie Dimon's Concern for a Large Market Correction

Often asked for his economic opinion and outlook, JPMorgan Chase JPM CEO Jamie Dimon alluded to concerns of a broader economic slowdown and the possibility of a large stock market correction while speaking with Bloomberg on Thursday.

Pointing out that inflation has come in hotter than expected in every month so far this year except for April’s CPI data, Dimon's worries centered around the notion that stocks are high and whenever there is anticipation of a soft-landing things can go wrong.

Dimon compared suggestive inflationary and geopolitical risk with large corrections/recessions in which there were plenty of signs but they were still not expected in the preceding year such as the stock market crash in 1974 and 1982 (Black Monday) along with the more recent housing market collapse in 2008 that sparked a larger financial crisis.

These scenarios are certainly food for thought with the benchmark S&P 500 hitting fresh record highs this week and making stocks that can sustain during an eventual correction more appealing.  

Defensive Stocks to Consider

Walmart WMT: Historically known for weathering economic downturns and market volatility, Walmart’s stability and reliance makes its stock a top choice during corrections. The omnichannel giant's diversification into e-commerce has only increased its operating efficiency with Walmart releasing its Q1 results on Thursday and posting 6% sales growth while adjusted operating profit spiked 13%.

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Image Source: Zacks Investment Research

Utility Stocks: Because of their stability and dividends, market interest tends to shift towards more conservative equity sectors like utilities during heightened volatility with Duke Energy DUK, NextEra Energy NEE, and Southern Company SO being three of the largest utility stocks by market value.

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Image Source: Zacks Investment Research

Gold Mining Stocks: Having a track record for holding its value during economic uncertainty while traditional currencies falter, gold tends to be a favorite among defensive assets. Notably, several gold mining stocks currently boast a Zacks Rank #1 (Strong Buy) including Agnico Eagle Mines AEM, AngloGold Ashanti AU, and Gold Fields Limited GFI.

Honorable Mention 

Somewhat of a dark horse in this narrative of stocks offering defensive safety is Nvidia NVDA. While inflation tends to have a bleak effect on the broader technology sector, economic growth tied to demand for artificial intelligence should continue. This has started to peak the sentiment of certain tech stocks being of interest even during economic headwinds. Being revered as the market leader in producing semiconductor chips that power AI, it's noteworthy that Nvidia currently sports a Zacks Rank #1 (Strong Buy).

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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report

Southern Company (The) (SO) : Free Stock Analysis Report

Duke Energy Corporation (DUK) : Free Stock Analysis Report

Walmart Inc. (WMT) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

AngloGold Ashanti PLC (AU) : Free Stock Analysis Report

Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report

Gold Fields Limited (GFI) : Free Stock Analysis Report

JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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