Shares started the first trading day of the new year much the same way they closed 2022 – with broad-based declines on relatively light volume.
Some pessimistic economic data (opens in a new tab) and the gloomy outlook for the International Monetary Fund weighed on sentiment on Tuesday, while the sell-off in key stocks also did not help equity markets.
It was a light day for economic news, but what the market got, it certainly didn’t like. U.S. manufacturing activity continued to contract in December, with operating conditions deteriorating at the fastest rate since the peak of the COVID-19 pandemic in May 2020, according to the S&P Global US Manufacturing Purchasing Managers’ Index (opens in a new tab).
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“The manufacturing sector posted a weak performance at the end of 2022, as production and new orders contracted at higher rates,” said Siân Jones, senior economist at S&P Global Market Intelligence. “Demand for goods has declined as domestic orders and export sales have fallen.”
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In another blow to the mood of market participants, the head of the International Monetary Fund warned that 2023 was ripe for widespread economic difficulties.
“We expect a third of the global economy to be in recession. (opens in a new tab)“said Kristalina Georgieva, managing director of the IMF, in an interview with CBS (opens in a new tab). “Why? Because the big three economies, the US, EU and China, are all slowing down simultaneously.”
At the single stock level, Apple (AAPL (opens in a new tab)-3.7%) heavily liquidated on the pursuit worries about iPhone 14 shipments (opens in a new tab) amid the COVID-19 outbreak sweeping China. As the largest company by market cap, AAPL hurt all three major indexes.
Meanwhile, stocks in You’re here (TSLA (opens in a new tab), -12.2%) continued to plunge after the electric vehicle company delivered fewer cars in the last three months of 2022 than analysts had expected. Is worried about weakening demand for Tesla vehicles (opens in a new tab)particularly in China, contributed to a long period of weakness for the stock.
At the closing bell, the blue-chip Dow Jones Industrial Average was down less than 0.1% at 33,136, while the wider S&P500 fell 0.4% to end at 3,824. The tech-heavy Nasdaq Compound fell 0.8% to end at 10,386.
Dividends and defense for 2023
After the worst year for stocks since 2008, many investors are looking to play defense (opens in a new tab) in 2023. Fortunately, strategies to reduce volatility (opens in a new tab)collect regular income (opens in a new tab) and zigzag when the wider market zags.
the best stocks for a bear market (opens in a new tab) should serve investors well as markets remain in a funk, just as should best ETFs for a bear market (opens in a new tab). And remember that blue-chip dividend-paying stocks, including best Dow dividend stocks (opens in a new tab) – have a history of outperforming the broader market when times are tough.
Regarding the the best dividend-paying stocks you can count on (opens in a new tab)it’s hard to beat the S&P 500 Dividend Aristocrats. Not only have these dividend growth machines easily beaten the broader market in 2022, but the magic of compounding ensures that even the aristocrats with the paltry returns can generate spurts of income one day.
Be sure to check out the full list of 65 Best Dividend Stocks You Can Count On For 2023 (opens in a new tab).