A corporate stock that tends to do better when the economy is turning down or heading for a standstill. Countercyclical industries include food, drugs, public transportation, etc. Some stocks rise in value when the economy or stock market is worsening (also when interest rates are sliding). A countercyclical stock typically belongs to a company whose financial performance that is negatively correlated to the state of the broader economy. Examples of countercyclical products include cigarettes, movies, soft drinks, electric utility services, groceries, etc. The prices of countercyclical stocks remain stable during an economic recession. In general, they consistently performs well whether the economy is weak or strong.
Countercyclical stocks are also known as defensive stocks.
