The Zacks Analyst Blog Highlights: Amazon.com, Microsoft, Facebook, Middlesex Water And M/I Homes

For Immediate Release

Chicago, IL – May 22, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Amazon.com, Inc. (NASDAQ:AMZN) , Microsoft Corp. (NASDAQ:MSFT) , Facebook, Inc. (NASDAQ:FB) , Middlesex Water Company (NASDAQ:MSEX) and M/I Homes, Inc. (NYSE:MHO) .

Here are highlights from Tuesday’s Analyst Blog:

5 of the Best Stocks to Ride Out Trade-War Tensions

U.S.-China trade relations continue to sour, with the technology sector facing the selling pressure the most. Several U.S. technology companies now have begun to comply with the Trump administration’s ban on China’s Huawei Technologies Inc. The White House has added Huawei to its Entity List that includes companies that American firms can’t sell technology to without obtaining a license from the U.S. government. By the way, this isn’t the Trump administration’s negotiating tactic but a long-term policy.

Following this, chip bigwigs like Intel (NASDAQ:INTC), Qualcomm (NASDAQ:QCOM) Corp and Broadcom (NASDAQ:AVGO) Inc, to name a few, have restricted supply of major software and hardware components to Huawei. To make matters worse, Google (NASDAQ:GOOGL) will now stop offering some of its services for devices made by Huawei.

Lest we forget, Huawei, the world’s second-largest smartphone maker, relies heavily on Google’s Android software to operate its smartphones. And we cannot forget that the company purchased computer chips of nearly $11 billion from America’s tech behemoths. What’s more, even foreign companies are restricted from selling products that include U.S.-made parts to Huawei. CNN business simplified this by saying that “Huawei won’t be able to buy, for example, chipsets from a Taiwanese supplier if those chipsets contain any U.S. parts or components.”

Trade negotiations between two of the world’s most powerful economies have fallen apart, after CNBC reported that the scheduling of the next round of talks is “in flux.” After all, neither side is willing to compromise. Protection of intellectual property rights continues to be a bone of contention for the economies.

While tech faces the brunt, investors are worried that the trade war might easily destabilize an already-slowing global economy and raise tensions between the superpowers regarding South China Sea and industrial espionage. The International Monetary Fund, in the meantime, warned a tariff war would pose a “threat to the global economy.”

But, the perils aren’t the same for all stocks. Let us, thus, look at the potential winners from a trade war —

Service Players Are Best Bets

Goldman Sachs (NYSE:GS) has expressed its opinion that service-oriented companies are less exposed to trade policy compared to goods-producing companies like Apple (NASDAQ:AAPL), Exxon Mobil (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ). This is because services firms, especially the likes of Amazon.com, Inc., Microsoft Corp. and Facebook, Inc., incur lower foreign input costs that might be subject to tariffs. Such input costs are mostly related to direct materials, labor and factory overheads.

Improvement in ad business as well as blistering growth trajectory in the cloud and, grocery and apparel segments currently bode well for Amazon. The Zacks Consensus Estimate for its current-year earnings has increased 0.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 32%, way ahead of the Zacks Investment Research

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Written By: Zacks Investment Research