The Wall of Worry is a higher barrier for investors to scale this year but there are still plenty of S&P/ASX 100 shares to keep your eye on, according to a top broker.
The figurative wall refers to the market pushing higher despite the growing list of problems. And there are problems aplenty.
Aggressive global interest rate hikes, the sharp slowdown in China's economy and a looming energy crisis in Europe are only some of the obstacles ASX investors have to climb.
Volatility ahead
The experts at Macquarie are also warning investors to brace for more volatility over the next six months. The broker said:
"We think it is hard to make a bull case for stocks when Industrial (non-resource) PEs are already high, we are in the middle of an earnings downgrade cycle and central banks continue to tighten to slow inflation. Our indicators also suggest the US will be in recession by early 2023."
But with volatility comes opportunity. Macquarie polled its analysts for their best ASX 100 shares to buy now.
Defensive ASX 100 shares to buy
One standout is the CSL Limited (ASX: CSL) share price. Macquarie likes the global biotech for its multiple growth drivers.
These include recovery in plasma collections, benefits from the Rika platform, earnings from Vifor and contributions from pipeline products.
Another on the buy list is diversified property giant GPT Group (ASX: GPT). Macquarie believes its defensive earnings and gearing puts it in a good position to outperform in this environment.
Speaking of defensive shares, Lottery Corporation Ltd (ASX: TLC) is also on the broker's most favoured list. Macquarie calls it one of the most defensive discretionary shares due to its long and exclusive lotteries and Keno licenses in Australia.
Best placed industrial shares
Meanwhile, Idp Education Ltd (ASX: IEL) is another top ASX 100 share pick due to its structural growth story. The long-term growth rate of international students stands at 7% to 10% a year and the group enjoys good operating leverage.
The James Hardie Industries plc (ASX: JHX) share price is also a top buy, in Macquarie's book. While the building materials supplier is under pressure from a slowing property market, the company is more exposed to renovations and remodelling – an area that has greater resilience to economic cycles.
Energy shock puts these ASX 100 shares on the buy list
Finally, there are two ASX 100 shares in the energy sector that made the cut. These are the Origin Energy Ltd (ASX: ORG) share price and Santos Ltd (ASX: STO) share price.
The energy shortage caused by the Russian-Ukraine war will drive up global gas prices and the two are well placed to benefit.
