What are the defensive industries for market crysis?
7/28/2025 04:18pm
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The deep research logic is organized as follows:
Okay, let's tackle the user's question about defensive industries during a market crisis. First, I need to understand what the user is asking. They want to know which industries are considered defensive, meaning they tend to hold up better during economic downturns.
Looking at the references provided, there are several mentions of defensive sectors. For example, Reference 10 lists utilities, healthcare, and consumer staples as top defensive industries. Also, Reference 19 discusses how these sectors are attractive during market volatility because of their stable cash flows and inelastic demand.
I should start by identifying the key defensive sectors from the data. The main ones mentioned are utilities, healthcare, and consumer staples. Let me check each reference to gather more details.
In Reference 10, there's a table with stock codes and their performance. The stocks listed under these sectors have high yearly percentage changes, which might indicate resilience. For instance, DDC.A (Consumer Staples) has a 306.63% increase, which is significant. Similarly, utilities like VVPR and LEU.A also show high growth.
Reference 19 mentions that during periods of policy uncertainty and Fed dilemmas, defensive sectors like utilities, healthcare, and consumer staples are attractive. This aligns with the user's interest in market crises.
I also need to consider the user's profile. They prefer the NASDAQ Composite Index and have a moderate risk tolerance. The answer should focus on sectors that align with a long-term, capital appreciation strategy.
Now, let's structure the answer. The conclusion should state the top defensive industries clearly. Then, break down each sector with key metrics and examples from the references. For instance, utilities have regulated earnings and inelastic demand, as seen in Reference 22. Healthcare, like Roche's performance in Reference 3, shows strong sales growth and resilience. Consumer staples, despite some challenges, have companies like Nestle (NSRGY) outperforming the sector, as noted in Reference 6.
I should also include a table summarizing the key points for each sector, using data from the references. Make sure to cite the sources properly with [^Number]. Additionally, since the user prefers a structured format, using markdown tables and headings will be effective.
Finally, the answer should reassure the user that these sectors are reliable during crises, aligning with their investment goals. Highlight the stability and long-term potential of these industries to support their strategy.
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### 🌊 **Conclusion**
**Utilities, Healthcare, and Consumer Staples** are the **top defensive industries** for market crises in 2025, offering **resilience** through stable demand, regulated earnings, and inelastic pricing. These sectors are **less sensitive to economic downturns** and provide **capital preservation** during volatility.
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### 📊 **Analysis**
#### 1. **Utilities: The Bedrock of Stability**
- **Key Metrics**:
- **Regulated Earnings**: Utilities like National Grid (NGG) reported **$3.97 billion in net income** in Q4 2025 .
- **Inelastic Demand**: Essential services (electricity, water) remain unaffected by economic cycles.
- **Defensive Valuation**: Utilities trade at a **Forward P/E of 16.58**, below the market average .
| Stock | Last Price | Yearly Change | Key Metric |
|-------|------------|---------------|------------|
| NGG | $72.15 | -0.11% | Net Income: $3.97B |
| VVPR | $4.88 | -12.7% | Yearly Growth: 266.92% |
#### 2. **Healthcare: Innovation-Driven Resilience**
- **Key Metrics**:
- **Sales Growth**: Roche Holding AG (RHHBY) reported **7% YoY sales growth** in H1 2025, driven by drugs like Vabysmo (severe eye diseases) .
- **Pricing Power**: Healthcare companies maintain **high margins** due to critical demand for medical services.
- **Market Performance**: Healthcare stocks outperformed the S&P 500 by **12 percentage points** during the 2020 pandemic .
| Company | 2025 Sales Growth | Key Drugs |
|---------|---------------------|-----------|
| Roche | +7% (CER) | Vabysmo, Hemlibra |
| Pfizer | +10% (Pharma unit) | Eliquis (direct-to-patient sales) |
#### 3. **Consumer Staples: A Fragile Safe Haven**
- **Key Metrics**:
- **Demand Stability**: Essential goods (food, beverages) remain in demand even during recessions.
- **Challenges**: Rising input costs (coffee beans, packaging) and competition from private-label brands .
- **Outperformance**: National Vision (EYE) returned **143.2%** YTD 2025, vs. 5.3% for the sector .
| Stock | Last Price | Yearly Change | Key Product |
|-------|------------|---------------|-------------|
| EYE | $N/A | +143.2% | Eyewear |
| NSRGY | $N/A | +14.3% | Food staples |
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### 🚨 **Why These Sectors?**
- **Utilities**: Regulated monopolies ensure steady cash flows, even during economic slowdowns.
- **Healthcare**: Essential services and innovation pipelines (e.g., gene therapy) provide long-term growth.
- **Consumer Staples**: Inelastic demand for basics like food and beverages cushions against market volatility.
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### 🛡️ **Investor Takeaway**
For a **long-term, capital preservation strategy**, allocate to **utilities** (e.g., NGG), **healthcare** (e.g., RHHBY), and **consumer staples** (e.g., EYE). These sectors offer **stability** during crises while maintaining **growth potential** through innovation and pricing power. 🛡️