Friday’s jobs data indicates a slowdown in the labor market. And year-over-year PCE inflation data from last week shows that’s trending down as well. The slowing economy may be slowing too quickly for some, even if it’s still growing overall.
No matter what the economy does, investors have plenty of opportunities that should continue to produce safe, steady returns. Whether the economy further slows, or accelerates back to growth.
One long-term potential winner is retail giant Walmart (WMT). The biggest company by employees and revenues, it’s also reshaped retail into providing customers with the lowest-cost goods.
Operationally, the retailer has had a mixed year. Shares are up 50%, but higher costs have led to a 40% drop in earnings growth. And Walmart famously keeps prices low to the detriment of its profit margin, which stands at just over 2%.
Action to take: Walmart is a reasonable play for a potentially slowing economy, and could see earnings accelerate as more consumers spend their valuable income there. Investors may want to build a starting position now, and use any market weakness to buy shares at a discount.
At current prices, Walmart pays a 1% dividend, but has a history of increasing that payout over time.
For traders, shares are still trending higher. The January 2025 $85 calls, last trading for about $2.95, could see mid-double-digit returns from a continuation of the uptrend past the holiday season.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.