The Stock Market Just Flashed a Warning Signal Seen Only Twice in 155 Years. Here Are 3 Stocks That Can Weather What History Says Comes Next.

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Rare Market Signal Flashes—Three Defensive Stocks to Watch

The S&P 500’s Shiller CAPE ratio is alarmingly high, hinting at a possible downturn; here’s how to stay defensive.

South African investors facing global equity markets may want to pay attention. The Shiller CAPE ratio, which smooths earnings over 10 years to judge valuation, has hit extremes only twice before: just before the 2000 tech crash and the 1929 Great Depression. The US market is arguably overheated, raising the risk of a correction impacting global funds, including those tied to JSE shares. Local investors should keep an eye on USD/ZAR as a risk barometer—volatile risk-off sentiment often weakens the rand, pressuring companies reliant on imports or foreign funding. Meanwhile, defensive sectors on the JSE like consumer staples (Shoprite, Woolworths) and stable earnings load-bearing firms such as Sanlam remain sensible holdings. Globally, companies with resilient cash flows—like Johnson & Johnson or Procter & Gamble—show the type of durability often missing in high-flying stocks. South African banks with diversified income, notably Standard Bank and FirstRand, could also withstand equity market shocks, given their strong domestic footprint. The signal could prove false if robust earnings growth continues or inflation eases more than expected. this is just our opinion and not financial advice