Microsoft is one of only two U.S. companies whose long-term debt is rated AAA.

Jeff Reeves lists stocks that should be relatively safe as business conditions threaten some companies with bankruptcy.

I went to lunch in downtown Washington, D.C., the other day, and only three tables out of three dozen were occupied. Then I went for coffee nearby and commented to the barista sanitizing everything, and she just shrugged at the empty cafe and said, “Nothing else to do today.”

That afternoon was a stark example of why the S&P 500 SPX, +4.24% continues to log big declines on a regular basis. It’s simple math — add up a perishable food inventory, steep rents and zero customers … and the sum is a real bankruptcy risk for businesses.

We’ve seen this movie before amid the cash crunch of the 2008 financial crisis. And we’re seeing glimmers of a sequel already in Italy, where the disease has peaked earlier than in the U.S. and other areas of Europe. Companies like Boeing BA, +7.86% have been brutalized, and as they max out lines of credit, we’re in the middle of a junk-bond breakdown.

In a raging bull market, cheap debt and creditworthiness didn’t matter. But now it matters more than ever. And here are five potential safe-haven stocks that have manageable debt, strong cash flow and reliable revenue that will keep them stable during this looming credit crisis.

Read more here

Originally posted by:

Jeff Reeves

www.marketwatch.com

March 13th, 2020