Investors have had little place to hide in 2022, with stocks and bonds taking a beating in a combination unprecedented in modern history. According to Evercore ISI’s Julian Emanuel, 2022 is the only year on record in which the S&P 500 and the US bond market have each lost 10% or more. When compared to other years, he shows 2022 as a major outlier so far. In previous bearish years for stocks, bonds used to rise as investors moved into safe havens. However, this year’s recession has coincided with a series of rate hikes by the Federal Reserve, driving down bond prices. Market volatility has also been unique. The recent pullback in stocks that erased much of a summer rally also seems like an outlier relative to history, Emanuel said. “Not only was there the 50% spike in August, but there was a 50% decline from the August peak to the middle (3981) of the June low in a matter of days. Such a 50/ 50 has occurred only 4 other times since 1950 and confirms that the prevailing bear market is not over,” Emanuel wrote. With that in mind, Emanuel said investors should look to more defensive stocks in the form of companies with strong free cash flow for dividends or share buybacks. “We see value in ‘Return on Capital’ stories and reiterate our preference for stocks with strong FCF, high total shareholder return, above-average return [earnings multiple] compression,” the note said. Source: Evercore ISI Research The names on the list include many companies with large profit margins, even if their near-term growth prospects are murky. The above stocks also have top ratings from Evercore analysts Meta Platforms, for example, is spending billions on VR development, yet still reported more than $6 billion in net income in the second quarter alone, while buying back more than $5 billion in stock. several financial stocks on the list that provide decent dividend yields for investors Bank of America and Capital One Financial have underperformed the S&P 500 this year, but have dividend yields of 2.7% and 2.4%, respectively. One stock on this list that has been a big winner this year is energy company APA Corp. The stock is up 40% year-to-date, and APA r delivered more than $800 million of free cash flow in the second quarter. In addition, Evercore advised investors to watch again First Downside Risk through options on the S&P 500. — CNBC’s Michael Bloom contributed to this report.