Consumer Staples are the Best Bet While Financials Worst Says Fidelity Strategist

Forget all the talk of a rebound in the financial and energy sectors, the odds say that defensive stocks are still an investors best bet, said Denise Chisholm, sector strategist at Fidelity. According to Chisholm, the highest probability is that the market continues to see a defensive rotation toward sectors with stable earnings growth like consumer staples, healthcare and utilities and away from more economically sensitive sectors like energy, financials and materials. "One of the key themes in the market has been profitability problems. Only half the time are profit contractions related to recessions, so this does not necessarily forecast a decline in GDP - this is a stock thing, not an economic thing," said Chisholm. "Earnings growth has been contracting, with more than just the energy and materials sectors driving it."