McDonald’s is an American multinational fast food chain. It was founded in 1940 in, California, United States. It is a US consumer discretionary corporation that has a strong seasonal pattern approaching.

With many analysts seeing a US recession approaching it is reasonable to expect that US consumers will eat out at restaurants less. However, that could mean some consumers ‘trade down’ to eating at fast food establishments instead.

Over the last 15 years, shares have risen 12 times between March 7 and May 6 for a healthy return of over 6%. The largest loss was -5.29%, but the largest drawdown was a hefty -26.63 % in 2020. However, that was a covid induced drop, so it would not be unreasonable to discount it.

Is McDonald’s a decent recession play?

Major Trade Risks: The major trade risk here is if the Fed signals a rate path of higher than 6% which could weigh on US stocks in the near term.

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