War, inflation, rising interest rates: What stocks to buy right now?

It has been more than a week since the start of the Russian invasion of Ukraine, with no end in sight despite recent peace talks.

Fighting between Russian and Ukrainian forces has intensified - more than 2,000 Ukrainian civilians have been killed so far, Putin has put Russia’s nuclear force on high alert and has confirmed that he will continue "without compromise" his offensive against the "nationalists" of Ukraine, Russian forces seized the biggest nuclear power plant in Europe at Zaporizhzhy.

Several agricultural and energy commodities have soared to record levels since the beginning of this conflict, intensifying inflationary pressures on most economies. Central bankers around the world are starting to end their ultra-accommodative monetary policy by increasing - or planning on increasing - their main interest rate to bring down inflation.

But with so much uncertainty about the war and its consequences, growth outlook and inflation pressures, as well as rising interest rates, stock markets have plummeted around the world, offering bargains in quality stocks.

Let’s have a look at some of the stocks that you might want to consider right now.

Defense and cybersecurity stocks

The arm, defense, and cybersecurity sectors are all benefiting from the conflict between Ukraine and Russia, as most economies are increasing their military spending to be able to better protect themselves via military and intelligence products and services. These companies might keep receiving orders if military tensions escalate in Eastern Europe.

Stocks to watch in this category

• Raytheon Technologies.

• Northrop Grumman.

• Lockheed Martin.

• General Dynamics.

• Thalès.

• Dassault Aviation et Dassault Systèmes.

• Leonardo SpA.

• Hensoldt AG.

• Rheinmetall AG.

• Bae Systems PLC.

• Chemring Group PLC.

• Qinetiq Group PLC.

• Ultra Electronics.

• Palo Alto Networks Inc.

• CrowdStrike Holdings, Inc.

• Fortinet Inc.

• Mandiant Inc.

• Darktrace.

Energy stocks

Because the conflict between Ukraine and Russia is disrupting the supply of oil and gas from Russia, prices of these energies have skyrocketed since the beginning of the conflict. Oil reached its highest level in almost a decade with WTI almost up 60 % since January, while natural gas futures indicate that there is still room for an upside after the commodity reached record highs.

While this situation has been beneficial for traditional oil and gas stocks, renewables have been soaring as well. As this situation shows Europe’s overdependence on Russian energy commodities, it might accelerate the need for 1) a diversification of energy supplies, and 2) a larger renewable energy capacity.

Stocks to watch in this category

• ExxonMobil.

• Devon Energy.

• ConocoPhillips Company.

• Chesapeake Energy Corporation.

• Chevron Corporation.

• Shell.

• BP.

• TotalEnergies.

• Sunrun.

• Sunnova Energy International.

• Sunlight Financial.

• Enphase Energy Inc.

• SolarEdge Technologies Inc.

• Clearway Energy.

• Brookfield Renewable.

• NextEra Energy.

• First Solar.

• Orsted.

• Vestas.

• Nordex.

• Siemens Gamesa.

Financial stocks

Some financial stocks are suffering from the general climate of uncertainty, between economic and financial sanctions against Russia and the extreme geopolitical tensions in Eastern Europe.

It is especially true for Western European banks exposed to Russia like Société Générale and UniCredit. First, because Russian financial assets have deteriorated sharply. Secondly, because banks are now facing increased operational risk to be sure that their operations are compliant with the imposed sanctions.

Banks usually perform poorly during recessions and uncertain times, as they are sensitive to the economy. However, when the conflict ends and the consequences of the war on growth might be easier to measure, banks may perform better.

Not to forget that with rising inflation, central banks around the world plan on increasing their interest rates. And financial institutions usually benefit from rate hikes, as higher interest rates usually means that their profitability will increase.

Stocks to watch in this category

• Goldman Sachs Group Inc.

• Bank of America Corp.

• Wells Fargo & Co.

• Citigroup Inc.

• JPMorgan Chase​​.

• BNP Paribas.

• HSBC Holdings.

• BNP Paribas.

• Crédit Agricole.

• Santander.

• Lloyds Banking Group.

• Barclays.

Automobile and vehicle parts stocks

Auto-makers have to face a new supply-chain crisis with the Ukraine War, as important industry suppliers have had to shut down plans close to the conflict zone - not to mention Trade restrictions and sanctions are hampering the movement of parts and cars to and from Russia.

Many European auto-markets also have to deal with the fact that Russia, which was seen as a growth market, will no longer be a market to focus on due to sanctions and decisions to interrupt all business activities with the country, which means that they’ll have to deal with lower sales in the future.

Still, these companies could perform better over the longer-term, and now that they’ve lost ground might be a good time to pick a company you believe might outperform the market over time.

Stocks to watch in this category

• Toyota Motor Corp

• Ford Motor Co

• Hyundai Motor Co

• Volkswagen AG

• Daimler AG

• Renault

• Faurecia

• Valeo

• Stellantis

• Fujikura Ltd

Final word

Being an investor in times of crisis isn’t always easy. However, market falls should always be seen as opportunities for you to rebalance your portfolio to achieve better diversification, take advantage of bargain prices, and bet on promising sectors that fit the current environment.

Also, remember not to panic and always keep in mind your financial goals, especially if you are a long-term investor.