Bank of America picks for the first quarter include Domino’s Pizza and this luxury retailer

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As the new calendar year kicks off, Bank of America is recommending several stocks to bet on in the new quarter. Rates hikes from the Federal Reserve, crippling inflation and geopolitical tensions abroad dominated investor sentiment in 2022, bringing stocks their worst yearly performance since 2008 . That market volatility is far from over, with Bank of America expecting little upside for the S & P 500 in 2023. But some stocks are better positioned to weather the uncertainty in the months ahead, with the bank outlining its top 10 ideas for the first quarter in a note to clients Tuesday. Here are some of the stocks included: Consumer discretionary stocks suffered in 2022 as fears of a slowdown in spending loomed. Despite these concerns, Coach owner Tapestry held up better than the broader market, falling about 6%. The company’s mix of products and styles that weather all seasons protects it from markdown risks, said analyst Lorraine Hutchinson. Continued product innovation should also support higher ticket prices, which have failed to receive pushback from clients in the past. “We highlight Tapestry as a top pick given its sustainable pricing power and solid capital return plan,” she wrote, expecting shares to gain as much as 18% from Friday’s close. “We see opportunity for continued Average Unit Retail gains as data analytics drive further choice count rationalization and more effective discounting.” Domino’s Pizza grappled with staffing issues that hampered delivery speed and its ability to meet consumer demand in 2022. Those headwinds should subside in the new year, with analyst Sara Senatore expecting “meaningful improvement” to earnings and sales in 2023. Shares of the restaurant stock tumbled more than 38% last year, but could rally 29% based on the bank’s 12-month price target of $448. “We expect the initiatives introduced in 2022 to improve delivery driver availability (more flexible scheduling, faster hiring, greater use of restaurant-supplied cars) to gain further traction in 2023, boosting comps for company-operated and franchised stores and growing volumes for the supply chain business,” Senatore wrote. Consumer staples stocks outperformed in 2022 as investors searched for safety in companies able to protect against slowing consumer spending. That included Procter & Gamble , which saw shares fall just 7.3%. Bank of America expects those tailwinds to continue, projecting more than 12% upside for the Ivory soap maker, compared with Friday’s close. “P & G has spent the time since the last recession narrowing its product portfolio and expanding price points both up and down the value ladder, helping to temper trade down risks,” wrote analyst Bryan Spillane. Humana was another 2022 outperformer that Bank of America recommends for the first quarter, with shares rallying more than 10% last year. Bank of America’s price target implies 25% upside from Friday’s close. — CNBC’s Michael Bloom contributed reporting