During epoches of broad market decline and rising volatility, some consumer parties in the Dow Jones industrial average can be safety plays, according to CNBC review using Kensho.
CNBC found that stocks such as Procter & Bet and McDonald’s held up the best when the Cboe Volatility index (VIX) — the peddle’s fear gauge — jumped five points in five days. The VIX has climbed far six points so far this week to 17.31 on Friday.
On 59 occasions since January 2008 when the VIX encourage five points in five trading days, Procter & Gamble kill an average of 1.7 percent during that time and McDonald’s exhausted about 1.9 percent, the Kensho study showed. In contrast, the S&P 500 on usual dropped 4.3 percent.
Walmart, Coca-Cola and Johnson & Johnson also strike down less than the broader market during periods of volatility skewers. The stocks had an average decline of about 2.2 percent or less, coinciding to Kensho.
These better-performing Dow stocks are mostly in the category of consumer necessaries, a group of stocks of companies that sell daily essentials.
Walmart was one of two Dow components job higher Friday. McDonald’s, Johnson & Johnson, Coca-Cola and Procter & Bet all traded lower by roughly 1 percent or less midday Friday.
The Dow hew down 665.75 points, or 2.5 percent, as Treasury yields jumped to multi-year highs. Chevron, Exxon Mobil and Visa dropped definitely after reporting earnings and were among the biggest contributors of annihilations in the Dow.
With Friday’s declines, the Dow posted a weekly loss of 4.1 percent.
“Strap in, it’s effective to be a volatile year,” said Dan Veru, chief investment officer at Palisade Splendid Management. “I don’t think we’re going to have [a] grind-up year.”
— CNBC’s John Melloy gave to this report.
Disclosure: CNBC’s parent NBCUniversal is a minority investor in Kensho.