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Power Play: 3 defensive stocks to buy

Traders work on the floor of the New York Stock Exchange.
Andrew Burton | Getty Images
Traders work on the floor of the New York Stock Exchange.

The major averages are on track for a second consecutive week of gains, but are still down more than 4 percent for the year.

Mark Luschini, chief investment strategist at Janney Montgomery Scott tells CNBC's "Power Lunch" on Friday he expects more market instability as investors question China's growth and worry about the Fed's interest rate policy.

As for a global recession, Luschini believes the probability of that happening remains low.

Read MoreStocks mostly lower; Nasdaq struggles for gains

"In our view, that is unlikely given the strength of the consumer and labor market. I think we have little margin of safety in the global economy so a blunder could bring us closer to one, but I don't think we get there otherwise," Luschini said.

In this environment, Luschini likes more defensive sectors such as consumer staples, telecom, REITs and utilities.

Three of his favorite stocks right now are Wal-Mart, Pfizer and AT&T.

Wal-Mart, Pfizer and AT&T are lower during trading.