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The Earnings360 Team
Today's Featured Article 3 Smart Defensive Stocks for an Uneasy MarketWritten by Chris Markoch. Published 11/18/2025. 
Key Points - Despite new market highs, recession risks remain elevated due to weakening consumer credit and signs of job market stress.
- Procter & Gamble and Johnson & Johnson offer stable dividends, strong balance sheets, and catalysts that could provide upside in a downturn.
- A rotation away from AI and into Dow components could make the DIA ETF a compelling defensive play for 2025.
At one point in early November, the Dow Jones Industrial Average (DJIA) briefly topped 48,000 for the first time ever. At different times in 2025, the NASDAQ and S&P 500 have made new all-time highs (ATHs). Despite sharp price swings, it's been a solid year to own stocks. Yet many economists, analysts, and investors remain uneasy. The market appears priced for perfection—but recession risks are not priced in. Street Ideas highlights early activity in small-cap names before they show up on mainstream radars. Stay ahead of the noise with alerts focused on real momentum, not hype. Get Early Access — Join Free Even with broad gains, some skepticism persists. The Magnificent 7 trade may have cooled off, but the market is clearly being lifted by a narrow group of names, mostly tied to the AI boom. The K-Shaped Economy Concern Current economic commentary focuses on a K-shaped recovery. Higher-income consumers are navigating inflation of around 3%—still above the Federal Reserve's informal 2% target but manageable for affluent households. Lower-income consumers, however, have been under pressure for several years. Evidence in credit defaults, delinquent auto loans, and a recent uptick in foreclosures suggests this problem is worsening. The labor market had been the economy's strongest pillar, but even that is starting to show signs of strain. JPMorgan Chase & Co. (NYSE: JPM) recently lowered its estimate of the probability of a recession from 60% to 40%, due to the recent de-escalation of trade tensions. But that's still a significant risk. Market Breadth Remains Narrow as Investors Chase Mega-Caps Recent data from Charles Schwab shows the percentage of S&P 500, NASDAQ, and Russell 2000 stocks trading above their 200-day moving average was slightly above 50%. That's historically low market breadth, and it adds to investors' concerns. This isn't a redux of 2021, when investors piled into unprofitable SPACs in hopes of quick gains. In many cases today, the froth is concentrated in mega-cap stocks that have substantial cash on their balance sheets. Still, many investors feel these stocks may be overvalued. So what's an investor to do? Here are three stocks (and one ETF) that offer the potential for asymmetric returns in an uneasy market. Procter & Gamble Has More Than a Dividend to Like Procter & Gamble Co. (NYSE: PG) is part of the exclusive Dividend Kings club, having raised its dividend for at least 50 consecutive years—70 years in PG's case—making it a staple for many income-oriented investors. The 2.8% dividend yield could become even more attractive if interest rates fall. Analysts' consensus $171.53 price target implies roughly 17% upside from current levels, suggesting room for capital appreciation as well as income. It's unclear how the company's proposed acquisition of Kenvue (NYSE: KVUE) would affect earnings. If the deal completes and the Tylenol controversy eases, the transaction would likely cause modest EPS dilution in the first year. Over time, however, management expects cost synergies that could turn early dilution into EPS accretion. Johnson & Johnson Doubles Down on Medtech and Oncology Growth Next is Johnson & Johnson (NYSE: JNJ), which spun off Kenvue in 2023 to focus on its medtech and pharmaceutical businesses. Its recent $3.5 billion acquisition of Halda Therapeutics illustrates that strategy. The all-cash deal gives JNJ access to Halda's clinical-stage candidate HLD-0915, a once-daily oral therapy for prostate cancer that has received fast-track designation from the U.S. Food & Drug Administration (FDA). This addition should materially strengthen JNJ's oncology pipeline, making the stock more attractive to growth-oriented investors while complementing its medtech franchise. The DIA ETF Could Benefit From a Flight to Safety Over the past five years, many investors have embraced a passive "SPY and chill" approach, meaning broad exposure to the SPDR S&P 500 ETF Trust (NYSEARCA: SPY). The SPY may still be a reasonable choice, but with potential AI overexuberance and narrow market leadership, it might be worth considering the SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA: DIA). If concerns over an AI bubble prompt a rotation out of high-flying tech names, investors may move toward the more diversified, blue-chip companies that make up the Dow 30. That rotation could make DIA a useful asymmetric play to capture a flight to safety. As of this writing, the DIA ETF shows about 37% institutional ownership. It has seen more buying than selling in seven of the last eight quarters, suggesting institutions are gradually building a hedge against a potential slowdown in the tech trade.
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