Share tip of the week: quality insurer
The February US non-farm payrolls data (due on 7 March, after this magazine went to press) will provide the clearest signal yet on whether the US economy is in recession or still teetering on a knife-edge. Economists are pencilling in a 25,000 rise for the month after January’s shocking 17,000 decline, with the unemployment rate nudging up to 5.0%. To me this is one of the most important (albeit lagging) indicators to guide your investment decisions. If the numbers are red, then GDP is shrinking and corporate earnings will suffer. During the last recession America lost 2.8 million jobs between February 2001 and August 2003, with unemployment topping out at 6.3%. If history repeats itself, I suggest lightening up on cyclical stocks (such as commodities and miners) that still assume strong growth, and instead recycle the proceeds into quality firms that have sound balance sheets but are already pricing in a recession. This stock falls squarely into the latter camp:
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Sir Antony Jay
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Sir Antony Jay
"I started with £3,000 and have doubled it to date, using a combination of tips in the 'at a glance' section." Fred McKenzie
"If you are a serious investor, you should be reading MoneyWeek." Rupert Foster, Chief Executive, FM Capital Management
"I bought into four European emerging markets funds following general info from your magazine, and so far I have achieved 25% gains." K Murphy, London
"Money Week encouraged me to go 100% oil, and I have gone £38K to £62K in a year." Garry Morrow, N Ireland
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