Bank of America believes the U.S. will tip into a recession, and that could have spillover effects on other regions — including Asia. "In the past seven U.S. recessions since 1973, Asian equities fell by an average of 50%, and [earnings per share] contracted by 30%. Both shallow and deep recessions were awful for Asia," Bank of America's strategists, led by Ajay Singh Kapur, said in a note dated Jul. 18. The bank is expecting a "shallow" U.S. recession, where gross domestic product will contract by around 1.5% from peak to trough. "While China's influence on the Asian economy/markets has raced ahead of the U.S. in the past 40 years, a U.S. recession remains very bad news for Asia/Emerging Markets (EM) equities," Kapur added. The bank noted that Asian equities have lost about 34% of their market value in this cycle, while EPS growth is down just 6%. History also suggests that Asia's price-to-earnings multiples could compress by another 20% if the bank's forecast of a mild recession comes true, according to Bank of America's analysis. "There is no way to sugar-coat the message for Asian and EM equities — markets, multiples and EPS growth all have downside," Kapur said. Stock picks to reflect 'cowardice' So how should investors position in such an environment? "We reproduce our 26 stock defensive, high quality basket of names – BofA Buy-rated large stocks (market capitalization above [$10 billion]) with low price and earnings volatility, high profitability and high dividend yields – that reflects our cowardice, and need to survive beyond the trough," Kapur said. The stocks named by the bank have five-year price and earnings volatility that rank in the bottom half of the bank's Asia-pacific coverage. They also pay a dividend yield of above 2.5%. A host of financial stocks turned up on the bank's screen. In addition to the above criteria, these stocks have return on assets — a profitability metric commonly used in the sector — of more than 1%. The list includes Indonesia's Bank Mandiri , China Merchants Securities , Haitong Securities and Malaysia's Public Bank . The screen also turned up several non-financial stocks that have positive free cash flow and are expected to have return on equity in excess of 10%. China Shenhua Energy is one of just three energy stocks that made the bank's list. The stock has returned 41% this year in U.S. dollar terms and is expected to grow EPS by 33.2% this year, according to Bank of America estimates. Singapore's telecommunications giant Singtel also made the screen. Bank of America believes the company will grow EPS by 39.1% this year. The stock has returned 9.6% year-to-date. Other stocks that made the bank's list include Taiwanese electronics contract manufacturer Hon Hai Precision , Australian telco Telstra and Chinese electrical appliance manufacturer Midea .