While the expectations for the second-quarter earnings season are hardly elevated, and many companies are expected to use the Brexit as a reason for perhaps lowering forward guidance, one thing is for sure: some are getting nervous. With global interest rates plunging, central banks have pushed investors into riskier stocks, and one Wall Street firm we cover is taking a very defensive stance for the third quarter.

A new Merrill Lynch report offers the firm’s top 10 ideas for the third quarter. Eight are buys and two are listed as underperformers. What we found interesting is the firm’s very defensive posture. It should be noted that Merrill Lynch has been somewhat bearish this year, and with good reason. While the Brexit is over, we still face the political season and other items that could lead to uncertain and perhaps unstable macro backdrops.

Here are the eight Merrill Lynch top U.S. ideas for the third quarter.

AT&T

After an outstanding first quarter from a stock price standpoint, this stock could be poised to go higher. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with TV customers in the United States and 11 Latin American countries. In the United States, the AT&T wireless network has the nation’s self-described strongest 4G LTE signal and most reliable 4G LTE. The company also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions.

With shares trading at a very cheap 14.3 times estimated 2017 earnings, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic, but increased device financing plans.

AT&T investors receive a 4.42% dividend. The Merrill Lynch price target for the stock is $46, and the Thomson/First Call consensus target is $39.56. Shares closed Tuesday at $43.35.

Gaming and Leisure Properties

This is a very unique and interesting way to play the gambling sector. Gaming and Leisure Properties Inc. (NASDAQ: GLPI) is a real estate investment trust (REIT) that is engaged in the business of acquiring, financing and owning real estate property to be leased to gaming operators in “triple net” lease arrangements, pursuant to which the tenant is responsible for all facility maintenance and insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted therein.

Shareholders receive an outstanding 6.4% distribution. Merrill Lynch has a $37 price target. The consensus target is $35.38, and shares closed Tuesday at $35.06.

Lowe’s

Many on Wall Street feel this company deserves a premium multiple to its peers, and it is also a top third-quarter pick. Lowe’s Companies Inc. (NYSE: LOW) operates as a home improvement retailer, offering products for maintenance, repair, remodeling and home decorating. Categories include kitchens and appliances; lumber and building materials; tools and hardware; fashion fixtures; rough plumbing and electrical; lawn and garden; seasonal living; paint; home fashions; storage and cleaning; flooring; millwork; and outdoor power equipment. The company also offers installation services through independent contractors in various product categories.

Lowe’s investors receive a 1.76% dividend. The Merrill Lynch price objective is $94. The consensus target is $86.83. Shares closed Tuesday at $79.42.
NextEra Energy

With a very strong balance sheet, NextEra Energy Inc. (NYSE: NEE) is poised for a solid second half of 2016. It is a leading clean energy company with consolidated revenues of over $17.0 billion, and approximately 44,900 megawatts of generating capacity, which includes megawatts associated with noncontrolling interests related to NextEra Energy Partners.

NextEra Energy’s principal subsidiaries are Florida Power & Light, which serves approximately 4.8 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the United States, and NextEra Energy Resources, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun.

Shareholders receive a 2.65% dividend. The $144 Merrill Lynch price target is well above the consensus of $127.60. Shares closed Tuesday at $130.87.

Raytheon

This company has a diversified mix of business, posted solid first-quarter numbers and is also on the Merrill Lynch High Quality and Dividend Yield screen. Raytheon Corp. (NYSE: RTN) is an industry leader in defense, government electronics, space, information technology and technical services. It operates in four principal business segments: Integrated Defense Systems, Intelligence, Information and Services, Missile Systems, and Space and Airborne Systems.

Investors are paid a 2.15% dividend. The Merrill Lynch price target is $150, and the consensus target is $141.13. The stock closed most recently a $136.70.

Realty Income

This top commercial REIT makes the Merrill Lynch top ideas list. Realty Income Corp. (NYSE: O) monthly dividends are supported by the cash flow from over 4,600 real estate properties owned under long-term lease agreements with regional and national commercial tenants. To date, the company has declared 552 consecutive common stock monthly dividends throughout its 47-year operating history and increased the dividend 86 times since its public listing in 1994.

The company also boasts in-house acquisition, portfolio management, asset management, credit research, real estate research, legal, finance and accounting, information technology and capital markets capabilities.

Shareholders receive a 3.4% distribution. The Merrill Lynch price objective is $70, and the consensus target is much lower at $59.27. Shares closed Tuesday at $71.47.

Salesforce.com

Once again this tech powerhouse reported outstanding numbers and the stock took off. Salesforce.com Inc. (NYSE: CRM) provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide. It offers enterprise cloud computing applications and platform services, including Sales Cloud that enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

The company blew away earnings estimates with a large billings beat, and virtually every platform and product area at the company has been posting much higher numbers than almost anyone expected. In addition, the company raised guidance for the rest of the fiscal year.

Merrill Lynch recently raised its price target to $100 from $90, and the consensus target is $97.11 The stock closed at $78.67.

Walgreens

This huge drugstore chain completes the list of the top ideas for the third quarter. Walgreens Boots Alliance (NASDAQ: WBA) operates as a pharmacy-led health and well-being company. It sells prescription drugs and an assortment of general merchandise, including non-prescription drugs, beauty products, photo finishing, seasonal merchandise, greeting cards and convenience foods through its retail drugstores and convenient care clinics.

It also provides specialty pharmacy services and manages in-store clinics under the brand Healthcare Clinic. As of August 31, 2015, this segment operated 8,173 retail stores under the Walgreens and Duane Reade brands in the United States and seven specialty pharmacy locations, as well as managed approximately 400 Healthcare Clinics.

Investors receive a 1.72% dividend. The Merrill Lynch price target is $94, and the consensus is set at $94.27. The stock closed Tuesday at $83.52.

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The two underperform rated stocks in the list for the quarter are Capital One Financial Corp. (NYSE: COF) and Williams-Sonoma Inc. (NYSE: WSM). Aggressive accounts may want to consider these for short sales.

Needless to say, all of these ideas are pretty conservative, and given the multitude of issues facing the markets, they all make good sense for growth accounts looking to stay involved, but play it safe.

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