U.S. stock market declines raise recession concerns

The stock market is experiencing a sell-off, raising concerns about a possible recession in the U.S. The Atlanta Federal Reserve now predicts a decline in gross domestic product (GDP) for the first quarter of 2025. This is a shift from earlier expectations of growth. In light of this situation, analysts suggest buying defensive stocks that might perform well during a recession. One such stock is Walmart. Historically, Walmart has done well during economic downturns. For instance, during the COVID-19 recession, Walmart's stock rose by 2%, while the S&P 500 fell by 25%. In the Great Recession of 2008-2009, Walmart's stock even increased by 12%. Walmart benefits from being a large grocery and general merchandise retailer. As budgets tighten during recessions, more consumers flock to Walmart for its low prices. The company is also gaining popularity among wealthier customers, thanks to its improved food selection and convenience services. The Walmart+ membership offers perks like free same-day delivery and streaming services, attracting more upper-income households. Another stock to consider is Philip Morris International, known for its tobacco products. Despite challenges, the company has maintained strong revenue growth through its traditional cigarette business, especially in international markets. Philip Morris is also seeing solid demand for its smokeless products like Zyn and IQOS, which are gaining popularity in the U.S. Zyn, a flavored nicotine pouch, is projected to grow significantly this year, while IQOS, a heated tobacco system, is expanding its market presence. These newer products have better profit margins than traditional cigarettes. Analysts believe that the demand for Philip Morris's addictive products will make it resilient in a recession, making it a potentially strong investment. Both Walmart and Philip Morris offer defensive options for investors looking to weather a downturn in the economy.