The Zacks Analyst Blog Highlights: G-III, Stifel, Discover, Caterpillar And Archer-Daniels
Zacks Investment Research | May 12, 2019 09:10PM ET
For Immediate Release
Chicago, IL –May 13, 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: G-III Apparel Group, Ltd (NASDAQ:GIII) , Stifel Financial Corp. (NYSE:SF) , Discover Financial Services (NYSE:DFS) , Caterpillar (NYSE:CAT) and Archer-Daniels-Midland (NYSE:ADM) .
Here are highlights from Friday’s Analyst Blog:
Trade War Heats Up: Here Are the Winners & Losers
Wall Street now braces for a full-fledged trade war between two of the world’s largest economies as the United States bumped up tariffs on $200 billion worth of Chinese products. Unfortunately, last minute talks between U.S. trade representative Robert Lighthizer and Chinese vice premier Liu He failed to salvage months of encouraging reports hinting at substantial progress in trade talks.
Tariffs on Chinese goods have risen to 25% from 10%, and Beijing has pledged to retaliate. China’s Commerce Ministry said that “the Chinese side deeply regrets that it will have to take necessary countermeasures.” The Ministry added that “it hoped that the U.S. and the Chinese side will work together to resolve existing problems through cooperation and consultation.”
The situation might worsen as President Trump threatened to levy tariffs on all Chinese goods with America. And this means imposing tariffs on the remaining $325-billion worth of Chinese products. His moves will invariably affect more than 5,000 China-made products, including fresh and frozen foods, chemicals, textiles, metalwork, building materials, electronics and consumer goods.
But, why are the United States and China at odds? China has always faced Trump’s wrath. Trump criticized trade imbalances between the countries. Protection of intellectual property rights by the way continues to be a bone of contention for the economies. Chinese delegates said that they will deal with such issues but Trump wants “strong enforcement language’’ to police any deal. China views the trade war as U.S.’ attempt to curb its growing influence across the globe.
Nonetheless, 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.” The body, which aims to ensure global financial stability, asked for a speedy resolution.
With possibilities of a heightened U.S.-China trade war looming, the stock market is bleeding. But not all stocks are facing the brunt. Let us, thus, look at the potential winners and losers from the trade war —
Two Tech Stocks That Avoid U.S.-China Trade Exposure
Technology stocks aren’t in great shape, especially, Apple (NASDAQ:AAPL). Thanks to trade-related issues, Apple has trimmed its fiscal first-quarter sales forecast, citing slowdown in iPhone sales in China. Chipmakers’ revenues are also expected to be impacted if China retaliates. Intel Corporation (NASDAQ:INTC) has cut its revenue forecast for 2019, citing lower demand from China.
But, two tech behemoths are less vulnerable to trade-related concerns — Facebook (NASDAQ:FB) and Netflix (NASDAQ:NFLX). Mark Mahaney, lead technology analyst at RBC Capital Markets, said that these companies have a low exposure to China at roughly 1% to 2%.
Additionally, Facebook is less pricey when its price-earnings ratio is considered. Netflix, incidentally, keeps producing top-notch original content which should consistently drive revenues. Shares of Facebook and Netflix have advanced at a solid pace so far this year. While Facebook jumped 43.9%, Netflix soared 35.5%. Facebook currently flaunts a Zacks Rank #2 (Buy) while Netflix has a Zacks Rank #3 (Hold). You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.