With rising COVID-19 cases threatening the economic recovery, many analysts expect the stock market to witness a correction in the near term. Though we don’t necessarily disagree, our view is that each market dip could be an opportunity to buy large-cap stocks América Móvil (AMX), HP (HPQ), LyondellBasell (LYB), and ASE Technology (ASX), which look undervalued at their current price levels. Let’s discuss.The stock market has been holding up despite the threat that rising COVID-19 cases could undermine the economic recovery. However, analysts predict that there will be a short-term correction. Miller Tabak’s chief market strategist Matt Maley expressed concern about a market correction. Also, a survey of 550 global investors by the Deutsche Bank (DE:) revealed a consensus expectation of a market pullback before year’s end.

While the Fed’s signal this week that it will continue supporting the economic recovery, for now, fueled a rally in the major benchmarks, the largest Chinese real estate company Evergrande’s potential collapse could fuel volatility in the near term. It could make sense to consider large-cap stocks as they are known to be resilient to market volatility, and can generate steady returns. Investors’ interest in large-cap stocks is evidenced by the Vanguard Large-Cap Index Fund ETF’s (VV) 33% gains over the past year.

So, the likely market pullback could be an excellent opportunity to bet on fundamentally sound large-cap stocks América Móvil, S.A.B. de C.V. (AMX), HP Inc. (NYSE:), LyondellBasell Industries N.V. (NYSE:), and ASE Technology Holding Co., Ltd. (NYSE:). The current market price of these names makes them look cheap.

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