Goldman Sachs just raised their recession probability due to stress in the banking system. These 20 stocks are least sensitive to an economic downturn, the bank says.
The events have boosted deposits at the country's biggest banks, but have spooked smaller banks, meaning they could be more reluctant to provide loans to their communities.
"Now banks are going to be much more cautious about lending, and this is going to be an accelerated tightening of financial conditions," said Lance Roberts, the CIO of RIA Advisors, in a call with Insider on Thursday."If those lending standards tighten, that's going to cramp consumer spending — 70% of the economy — you drag forward the recession."
"The big banks are fine," he continued."They are not solely dependent upon consumer banking and business banking for their income. They have big wealth management divisions, portfolio trading, investment banking. "Regional banks are a risk because they don't have access to that — their income is loaning money out, buying bonds, and collecting interest income," Roberts added."What we've seen with Silicon Valley Bank and First Republic, I think there's more of that risk out there."
If a recession comes, earnings and stocks likely face substantial further downside. But the stocks in the list below are resistant to slowing economic growth, Goldman Sachs says. The list is made up of the 20 biggest stocks in the bank's"Defensives Basket." They're listed in order of their market cap's weight in the basket.
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