Bear market stocks

Core business model depends entirely on transaction and clearing fees driven by market volatility.

CME Group stands to benefit from the sudden unwinding of derivatives and trades. High cross-asset volatility and rapid deleveraging force market participants to execute high-volume risk transfers through futures and options, which boosts CME's transaction fee revenues.

CME Group Inc., through its various subsidiaries, manages international marketplaces for the exchange of futures and options on futures contracts worldwide. Its extensive array of product offerings includes futures and options linked to a broad spectrum of underlying assets, such as interest rates, equity indices, foreign exchange, agricultural commodities, energy, and metals, alongside fixed-income products. The company additionally furnishes essential clearinghouse services, which entail the verification, settlement, and guarantee of futures, options, and cleared swap agreements traded across its venues. It also offers services for transaction processing and risk mitigation. Furthermore, the organization provides diverse market data services, encompassing both real-time and historical data feeds. Its wide-ranging client base consists of professional traders, financial institutions, both institutional and individual investors, corporations, manufacturers, producers, governments, and central banks. Founded in Chicago, Illinois, in 1898, the enterprise was formerly known as Chicago Mercantile Exchange Holdings Inc. before rebranding as CME Group Inc. in July 2007.

Revenue is almost entirely tied to the clearing and execution of transaction volume on its exchanges.

Cboe has positive but indirect exposure to the same increase in listed derivatives activity. It monetizes options, futures, equities and clearing through transaction fees, clearing revenue and market data; the read-through is weaker than for CME because the reported volume was generated on CME venues.

Cboe Global Markets, Inc. functions as a global operator of various financial exchanges, primarily renowned for its options trading platforms, all managed through its numerous subsidiaries. The company organizes its expansive business activities into five distinct segments. The Options segment specializes in the trading of listed market indices. Its North American Equities division facilitates transactions for listed stocks in the United States and Canada, also offering services for exchange-traded products (ETPs), encompassing both trading and listing. The Futures segment is dedicated to futures trading. The Europe and Asia Pacific division delivers a broad range of services, including transactions for pan-European listed equities and derivatives, ETPs, exchange-traded commodities, and international depository receipts, along with ETP listing and clearing provisions. Finally, the Global FX segment serves institutional foreign exchange trading and non-deliverable forward FX transactions. Cboe Global Markets has established important strategic partnerships with key players such as S&P Dow Jones Indices, LLC; FTSE International Limited; Frank Russell Company; MSCI Inc.; and DJI Opco, LLC. The company, which originated in Chicago, Illinois, in 1973, previously operated as CBOE Holdings, Inc. until its rebranding in October 2017.

Reported historic 17% comp growth, demonstrating it is the primary beneficiary of the current trade-down environment.

Ross Stores is a potential relative beneficiary as cautious consumers seek lower prices and off-price merchandise. The Walmart signal supports a broader value-seeking and trade-down environment, although Walmart itself is also competing aggressively for value-oriented traffic.

Ross Stores, Inc., through its various subsidiaries, manages a chain of off-price retail establishments focusing on apparel and home goods. These stores operate under two main brand names: Ross Dress for Less and dd's DISCOUNTS. Their product selection primarily includes clothing, accessories, footwear, and household decor. The Ross Dress for Less outlets primarily serve middle-income households, offering merchandise at prices considerably lower than traditional department and specialty stores. Conversely, dd's DISCOUNTS stores cater to moderate-income households, providing products at prices below those typically found in department and discount stores. As of July 5, 2022, the company had approximately 1,950 stores operating across 40 states, the District of Columbia, and Guam. Ross Stores, Inc. was founded in 1957 and is based in Dublin, California.

The quintessential 'trade-down' beneficiary, gaining even high-income shoppers during downturns.

As structural inflation erodes real purchasing power, consumers are increasingly 'trading down' to discount retailers. Walmart is a primary beneficiary of this value-seeking behavior, capturing market share from mid-tier discretionary retailers.

FTI can capture turnaround, valuation, cash-flow, lender-advisory, rescue-financing, and restructuring work generated by private-credit stress.

Private-credit distress can increase demand for turnaround management, cash-flow analysis, valuation, lender advisory, rescue financing, and chief-restructuring-officer services provided by FTI Consulting.

PJT can capture creditor-advisory, restructuring and distressed-financing mandates during refinancing stress.

More private-credit defaults and distressed exchanges can generate incremental Chapter 11, liability-management, creditor-advisory, and restructuring mandates for PJT Partners.

Correlated as royalty portfolio valuations move in tandem with structural central bank reserve trends.

Franco-Nevada Corporation operates as a royalty and stream company focused on precious metals in South America, Central America, Mexico, the United States, Canada, Australia, Europe, and Africa. It operates through Precious Metals, Other Mining and Energy segments. The company manages its portfolio with a focus on precious metals, such as gold, silver, and platinum group metals; and engages in the sale of crude oil, natural gas, and natural gas liquids through a third-party marketing agent. The company was founded in 1986 and is headquartered in Toronto, Canada.

Dollar stores are explicitly positioned to benefit when consumers seek lower-priced products and reduce discretionary spending.

Dollar General Corporation is a prominent discount retail chain that offers a wide array of merchandise across the southern, southwestern, Midwestern, and eastern regions of the United States. Its extensive product assortment primarily features consumable items. This includes household essentials such as paper products, cleaning supplies, and laundry detergents; a wide array of food options, ranging from shelf-stable groceries like cereals, pasta, canned goods, condiments, and baking ingredients, to fresh and refrigerated perishables such as milk, eggs, bread, and frozen foods, as well as alcoholic beverages like beer and wine. The selection further encompasses popular snacks (candies, cookies, crackers, and carbonated drinks), health and beauty aids (over-the-counter medications, personal care items, cosmetics, dental, and foot care products), pet food and supplies, and tobacco products. Beyond consumables, Dollar General offers seasonal merchandise, which includes holiday decorations, toys, electronics, greeting cards, stationery, prepaid phone services and accessories, gardening tools, hardware, automotive items, and home office supplies. Customers can also find various home goods, from kitchenware and small appliances to lighting, storage solutions, frames, candles, craft materials, and soft furnishings for the kitchen, bed, and bath. Lastly, the company stocks a selection of apparel, featuring everyday clothing for infants, children, women, and men, along with socks, underwear, disposable diapers, shoes, and accessories. As of February 25, 2022, Dollar General operated an impressive 18,190 stores spread across 47 U.S. states. Originally established in 1939 as J.L. Turner & Son, Inc., the company adopted its current name, Dollar General Corporation, in 1968. Its corporate headquarters are situated in Goodlettsville, Tennessee.

Dollar Tree's low-priced essentials and consumables are relatively defensive when households trade down.

Lower-priced household essentials and value merchandise can benefit when households trade down. Dollar Tree's consumables exposure provides a relative demand benefit, although financially stressed customers may reduce nonessential purchases.

Dollar Tree, Inc. (DLTR) operates as a leading discount retailer, managing its extensive operations through two principal divisions: Dollar Tree and Family Dollar. The Dollar Tree segment distinguishes itself by offering all its merchandise at a consistent price of $1.25. Its product range is broad, encompassing essential consumables like confectionery, various food items, health and personal care products, household cleaning chemicals, paper goods, and frozen or refrigerated foods. Beyond these daily necessities, customers can find a diverse selection of general merchandise, including toys, resilient housewares, gifts, stationery, party essentials, greeting cards, softline apparel, and arts and crafts supplies. The segment also prominently features seasonal items for holidays such as Christmas, Easter, Halloween, and Valentine's Day. By January 29, 2022, this division maintained a substantial presence with 8,061 retail locations across its Dollar Tree and Dollar Tree Canada brands, supported by 15 distribution centers in the U.S. and an additional two in Canada. Conversely, the Family Dollar segment functions as a general merchandise discount chain with varying prices. Its inventory is comprehensive, covering a wide array of consumable goods such as groceries, beverages, tobacco, personal care and health products, household chemicals, paper products, hardware, automotive accessories, diapers, batteries, and pet food and supplies. Additionally, the segment provides home products, which include housewares, home décor, giftware, and domestics like bedding and towels. Shoppers can also find apparel and accessories, encompassing clothing, fashion items, and footwear. Seasonal and electronics merchandise, ranging from holiday-specific goods to pre-paid cellular phones and services, along with stationery, school supplies, and toys, are also key offerings. As of January 29, 2022, the Family Dollar brand operated 8,016 stores and was supported by 11 distribution centers. Founded in 1986, Dollar Tree, Inc. is headquartered in Chesapeake, Virginia.

Costco is leading the trade-down trend with superior traffic and ticket growth from a higher-income demographic seeking value.

Dollar General’s sustained traffic growth reinforces the broader value-seeking and trade-down trend, which can support Costco’s warehouse traffic, grocery sales, and private-label demand. Costco competes with Dollar General and Walmart for budget-conscious shoppers, so the read-through is positive but not exclusive.

Off-price apparel and home formats can capture consumers seeking lower prices and selective discretionary purchases as real income growth slows.

TJX's off-price retail model (TJ Maxx, Marshalls) typically thrives when consumer sentiment is low as shoppers trade down from premium brands to seek value and branded merchandise at steep discounts.

ICE captures elevated trading and clearing fees amid policy uncertainty as market participants seek to hedge risks.

The 33% rise in sales and trading revenue reported by BAC is a direct indicator of elevated trading volumes. As an exchange operator, ICE benefits from increased transaction-based revenues and clearing fees generated by the high levels of market volatility and client activity described.

Intercontinental Exchange, Inc. (ICE) manages a global network of regulated financial venues, encompassing exchanges, clearing houses, and listing platforms. These operations serve diverse markets, including commodities, financial instruments, fixed income products, and equities, with a geographical footprint spanning key financial centers such as the United States, United Kingdom, European Union, Singapore, Israel, and Canada. The company's business is segmented into three core areas: Exchanges, Fixed Income and Data Services, and Mortgage Technology. Within its Exchanges segment, ICE oversees a robust network comprising 13 regulated exchanges and 6 clearing houses. These extensive marketplaces enable the listing, trading, and clearing of a wide spectrum of derivatives contracts and financial securities. This includes futures and options across diverse sectors such as energy, agriculture, metals, financials, and equities, in addition to providing critical listing, market data, and connectivity solutions. The Fixed Income and Data Services division provides comprehensive analytics and execution services for fixed income products, manages Credit Default Swap (CDS) clearing, and offers multi-asset class data and network solutions. Furthermore, its Mortgage Technology segment delivers an advanced, proprietary platform designed for residential mortgage origination. This division also provides closing solutions that streamline connections across the mortgage supply chain and facilitate secure information exchange, alongside data analytics and "Data as a Service" offerings for lenders to access vital origination insights. Intercontinental Exchange, Inc. was established in 2000 and maintains its headquarters in Atlanta, Georgia.

McDonald's acts as a strong beneficiary of trade-down flows, capturing market share from premium dining and smaller chains through its scale-driven value bundles.

Considered a 'retirement staple' with highly predictable franchised cash flows.

McDonald's is a primary beneficiary of the 'manageable' 0.3% food-away-from-home inflation, as it allows the company to sustain its aggressive McValue 2.0 strategy. The broader inflationary environment (4.2% headline) continues to drive 'trade-down' traffic from full-service restaurants and premium fast-casual peers toward McDonald's affordable bundles.

Evercore’s financial-restructuring practice is directly aligned with the advisory needs created by Symplr-like maturity extensions, rescue financings, and creditor negotiations, although no Symplr mandate is disclosed.

Evercore provides restructuring and liability-management advice. A failed or delayed amendment for White Cap could increase demand for independent restructuring, recapitalization, or creditor-negotiation work, but no Evercore engagement is identified.

Ollie’s off-price merchandise is partly discretionary, but its extreme-value proposition can preserve traffic and attract shoppers during periods of consumer pessimism.

Off-price retailers historically gain market share during periods of deep consumer pessimism, as customers from various income brackets prioritize extreme value.

Burlington is a direct off-price beneficiary when consumers seek value while retaining some discretionary spending.

Five Below’s strong comparable-sales growth supports the broader thesis that consumers are favoring value retail. Burlington may gain traffic and discretionary share, though it competes with Five Below and other value formats for the same household budget.

Loblaw has direct exposure through No Frills, Maxi, and other discount formats that can capture shoppers trading down.

Loblaw is a relative beneficiary because its No Frills, Maxi, control-brand, and other value offerings can capture Canadian shoppers trading down. The benefit should support discount-banner traffic and private-label mix, although Dollarama also competes for grocery and household baskets.

Triple Flag Precious Metals Corp., a precious metals streaming and royalty company, engages in acquiring and managing precious metals, streams, royalties, and other mineral interests in Australia, Canada, Colombia, Cote d’Ivoire, Mexico, Mongolia, Peru, South Africa, and the United States. The company has a portfolio of streams and royalties providing exposure to copper, gold, silver, nickel, lead, lithium, and zinc. The company was founded in 2016 and is based in Toronto, Canada.

Gold Royalty is expanding its own precious-metals royalty and streaming portfolio and faces potential competition from additional funded buyers.

Gold Royalty Corp. is a financial entity focused on precious metal royalties, providing capital solutions to the broader metals and mining industry. Its business model centers on acquiring diverse royalty interests, streaming agreements, and similar revenue streams at various stages of a mine's operational lifespan. This strategy aims to build a robust portfolio capable of generating attractive returns for its investors in the near, medium, and long term. The company's current holdings comprise net smelter return royalties, which range from 0.5% to 2.0%, on seventeen gold properties located across the Americas. Gold Royalty Corp. was founded in 2020 and has its principal executive office in Vancouver, Canada.

The IFR’s finding that most English clubs are loss-making or dependent on owner funding increases the contingent market for insolvency administration, restructuring and creditor advisory work. Begbies Traynor has a relevant restructuring and liquidation practice, but no event-specific appointment is disclosed and the regulatory regime may prevent some failures.

A rising private-credit default rate should increase demand for restructuring investment banking, liability-management advice, distressed exchanges, refinancing, and creditor negotiations, supporting Houlihan Lokey’s advisory revenue.

Houlihan Lokey, Inc. is a prominent global investment banking firm offering a comprehensive suite of financial advisory services. These include expertise in mergers and acquisitions (M&A), capital markets, financial restructuring, and valuation. The company's operations are divided into three core segments: The Corporate Finance division provides broad financial guidance. It assists both public and private entities with strategic buy-side and sell-side transactions and a variety of capital-raising activities, such as leveraged loans, private mezzanine debt, high-yield debt, initial public offerings (IPOs), follow-on offerings, convertibles, equity private placements, and private equity investments. This segment also advises financial sponsors on diverse deal structures and liability management initiatives. The Financial Restructuring segment guides debtors, creditors, and other involved parties through complex recapitalization and deleveraging processes. Its specialized advisory services encompass the design, negotiation, and confirmation of reorganization plans, the structuring and analysis of exchange offers, corporate viability assessments, expert testimony for dispute resolution, and the procurement of debtor-in-possession (DIP) financing. The Financial and Valuation Advisory group specializes in appraising various asset types, including entire businesses, illiquid debt and equity securities, and intellectual property. It delivers critical fairness opinions for M&A and other transactions, as well as solvency opinions for corporate spin-offs and dividend recapitalizations, alongside other financial assessments. This segment further contributes to dispute resolution services. Established in 1972, Houlihan Lokey serves a diverse clientele, including corporations, institutions, and governmental entities. Headquartered in Los Angeles, California, the firm maintains a significant international presence with offices located across the United States, Europe, the Middle East, and the Asia-Pacific region.

Duke is a regulated utility owner whose rate-base earnings can capture approved distribution, transmission, and grid-modernization investment.

Additional tightening raises Duke Energy’s refinancing expense and the discount rate applied to its long-duration regulated infrastructure cash flows. Regulated revenues provide only partial protection, with no corresponding floating-rate asset-income benefit.

National Grid has strong resilience from defensive regulated revenues and energy-infrastructure demand, although financing costs and discount rates still create a negative rate effect.

The July CPI reading keeps the possibility of delayed monetary easing alive, which can increase the discount rate and financing cost applied to capital-intensive regulated utilities. The effect is modest because regulated revenues are relatively defensive and the headline increase was driven by a pass-through energy-price reset rather than broad services acceleration.

Middlesex Water Company operates regulated water and wastewater utility systems predominantly in the eastern United States, specifically in New Jersey, Delaware, and Pennsylvania. The company's business is structured into two segments: its core regulated operations involve collecting and distributing water to a diverse customer base including residential, commercial, industrial, and fire protection users. A smaller non-regulated segment offers contract-based services for managing private water and wastewater systems. The vast majority of the company's earnings originate from its regulated utility business, with residential customers being the primary revenue source.

Middlesex Water Company primarily delivers vital water and wastewater utility services, structured around two key business units. Its regulated operations are dedicated to the acquisition, treatment, and distribution of water to a broad spectrum of retail and wholesale clients, including residential, commercial, industrial, and fire protection users. This division also oversees regulated wastewater systems in both New Jersey and Delaware. Complementing this, the company's non-regulated segment furnishes contract-based services for the management and maintenance of municipal and private water and wastewater infrastructure within the same states. The firm, established in 1896, maintains its corporate headquarters in Iselin, New Jersey.

Essential Utilities has meaningful natural-gas distribution rate-base exposure in a regional footprint that includes Ohio, Pennsylvania and West Virginia, alongside its water operations.

Essential Utilities, Inc. is a diversified utility enterprise that, through its various operating units, delivers vital water, wastewater, and natural gas services within the United States. Its operations extend beyond direct utility provision, encompassing contractual management and maintenance of water systems for municipal authorities and other organizations. The company also offers specialized non-utility services, such as providing untreated water resources for the natural gas drilling sector and, via a third-party partner, supplying protective and repair solutions for household water and sewer lines. Catering to an extensive client base of approximately 7.5 million residential, commercial, industrial, fire protection, and general utility customers, Essential Utilities operates under the well-known Aqua and Peoples brands across a significant geographic footprint. This footprint includes Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, West Virginia, and Kentucky. Founded in 1886, the corporation is headquartered in Bryn Mawr, Pennsylvania, and adopted its current name, Essential Utilities, Inc., in February 2020, previously being known as Aqua America, Inc.

As the utility, Dominion is the entity deploying the capital, but it generates regulated returns on this spending.

Dominion Energy, Inc. is an American energy company that provides regulated electricity and natural gas services. It generates, transmits, and distributes electricity to customers in Virginia and the Carolinas, and distributes natural gas to customers in multiple states including South Carolina, Ohio, and Utah. The company's asset portfolio includes electric generation capacity from various sources including renewables, electric transmission and distribution lines, and natural gas infrastructure.

Fix Price Group PLC is a major international variety value retailer, operating a large chain of stores primarily in Russia and neighboring countries. The company offers a wide range of household goods, food, and other consumer products at low, fixed price points. It focuses on providing affordable goods to a broad customer base.

Grocery Outlet Holding Corp. operates a network of retail stores across the United States, offering name-brand consumables and fresh products through independently operated locations. The company was founded by Jim Read in 1946 and is headquartered in Emeryville, California.

Necessities and household products are relatively defensive as lower-income consumers reduce discretionary purchases and prioritize essential goods.

Classic defensive staple; investors rotate here when they fear economic cooling.

Procter & Gamble produces essential consumer staples, which enjoy inelastic demand and pricing power. During stagflationary periods (indicated by high Prices Paid and contracting services employment), investors favor defensive names like PG over higher-multiple growth stocks or highly cyclical consumer discretionary companies.

Utilities are non-discretionary essential services, meaning demand is highly inelastic and does not contract significantly in a cooling economy.

As a leading competitor in the utility sector and a primary choice for income-seeking institutional investors, NEE benefits from the maintained yield attractiveness of the utility sector signaled by Southern's dividend consistency.

As a regulated monopoly utility, Pinnacle West has extremely high revenue visibility, supported by a massive backlog of committed large-load industrial customers under long-term power delivery frameworks.

Consolidated Edison, Inc., through its various subsidiaries, primarily operates in the regulated sectors of electricity, natural gas, and steam distribution across the United States. The company supplies electric power to approximately 3.5 million households and businesses in New York City and Westchester County. It also delivers natural gas to about 1.1 million customers located in Manhattan, the Bronx, specific parts of Queens, and Westchester County, while providing steam services to around 1,555 clients in certain Manhattan areas. Beyond these core regions, Consolidated Edison extends its electricity provision to roughly 300,000 customers in southeastern New York and northern New Jersey, and serves approximately 100,000 natural gas consumers in southeastern New York. Its extensive operational framework encompasses 533 circuit miles of transmission lines and 15 transmission substations. For distribution, it manages 64 substations, 87,564 in-service line transformers, 3,924 pole miles of overhead lines, and 2,291 miles of underground cabling. The natural gas network further includes 4,350 miles of main pipelines and 377,971 service connections. The company also engages in owning, operating, and developing projects for renewable energy and broader energy infrastructure. Furthermore, it offers a range of energy-related products and services to both wholesale and retail markets, and strategically invests in new electric and gas transmission ventures. Its electricity sales are predominantly directed toward industrial, commercial, residential, and governmental clients. Established in 1823, Consolidated Edison's corporate headquarters are situated in New York, New York.

Utility demand is essential and relatively defensive; EDP’s evidenced inflation pathway is financing-cost pressure rather than household volume contraction.

EDP’s capital-intensive renewable-generation and utility-infrastructure portfolio faces higher debt-financing costs and project hurdle rates when the ECB begins a tightening cycle. Regulated and contracted revenues provide only partial protection.

Electricity and gas are essential services, so usage is relatively defensive; the evidenced Enel exposure is primarily procurement and customer-protection cost pressure rather than materially lower demand.

SSE’s regulated and contracted revenues provide resilience against household-demand weakness and allow better recovery of some operating-cost inflation.

The incremental hawkish signal raises financing costs and the discount rate applied to SSE’s long-lived infrastructure investments and utility cash flows. Regulated and contracted revenues provide partial protection.

NZX is insulated from policy-driven demand drops as trading activity often spikes during times of high uncertainty and market volatility.

As the operator of the New Zealand Stock Exchange, NZX Limited benefits from increased trading and clearing volumes. Political uncertainty and economic policy uncertainty (EPU) historically spike domestic stock market volatility and average stock correlations, directly boosting NZX's transactional and clearing revenue.

Utilities/Infrastructure are high-confidence defensive rotation candidates.

Waste Management functions as a defensive utility and service infrastructure proxy. It typically benefits from capital rotation into essential service sectors that are less sensitive to consumer discretionary slowdowns.

Low sensitivity due to defensive cash flows and relatively stable demand regardless of interest rate shifts.