After a summer of elevated gas prices, every driver has felt the pain at the pump. But now, the trend seems to have reversed, just in time for the busy holiday travel season.
According to motoring and leisure travel giant AAA, the average price of regular gas) in the U.S. currently sits at $3.214 per gallon, which is below the $3.323 per gallon we saw this time last year.
Patrick De Haan, head of petroleum analysis at fuel price tracker GasBuddy, sees the trend continuing as Americans prepare to hit the road for the holidays.
In a recent Fox Business interview, the host asked De Haan whether the national average price of regular gas could drop below $3 a gallon.
His answer was positive.
“I think that certainly looks like a very good possibility here, probably as early as December 23,” he said.
And since rising gas prices drove up inflation earlier on, falling gas prices might help bring it down.
“This is where there’s some deflation happening,” De Haan added.
De Hann is not the only one seeing inflation slowing down. Goldman Sachs strategists have a similar view.
“Our economists expect by early 2023 it will become clear that inflation is decelerating and the Fed will reduce the magnitude of hikes and eventually cease tightening,” Goldman Sachs chief U.S. equity strategist David Kostin wrote in a recent note to investors.
The investment bank also identified a list of stocks that tend to outperform in a falling inflation environment. Here’s a look at three of them.
Don’t miss
AT&T
Let’s start with a household name.
AT&T (NYSE:T) is one of the largest telecommunications companies in the world. More than 100 million consumers in the U.S. use its mobile and broadband services. At the same time, the company also serves nearly all of the Fortune 1000 companies with connectivity and smart solutions.
And because wireless and internet services are essential for the modern economy, AT&T generates recurring business through thick and thin.
The company pays quarterly dividends of 27.75 cents per share, translating to an annual yield of 5.8%.
Considering that the average S&P 500 company yields just 1.6% at the moment, AT&T could be worth a look for income-seeking investors.
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United Parcel Service
E-commerce has been one of the fastest-growing segments in the market, and the stay-at-home environment induced by the pandemic only made online shopping more popular.
But it’s freight companies like United Parcel Service (NYSE:UPS) that made e-commerce possible in the first place.
UPS posted solid financial results for Q3, as consolidated revenue grew 4.2% year-over-year to $24.2 billion. Meanwhile, adjusted earnings per share rose 10.3% to $2.99.
Shares are down 14% in 2022, but a potentially strong holiday quarter could bring back some investor enthusiasm. Management expects full year consolidated revenue to be around $102 billion.
Walgreens Boots Alliance
Despite being one of the essential service providers, Walgreens Boots Alliance (NASDAQ:WBA) hasn’t been a market darling. Shares are down 23% in 2022 and 43% over the past five years.
But the company is on Goldman Sachs’ list.
That’s likely because while Walgreens shares have fallen, its payout to shareholders has been on the rise. In July, the company boosted its quarterly dividend by 0.5% to 48 cents per share, marking its 47th consecutive annual dividend increase.
Looking further back, you’ll see that the retail pharmacy giant has paid uninterrupted dividends for more than 89 years. The stock currently yields 4.7%.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: https://finance.yahoo.com/news/gas-below-3-could-days-130000316.html