The Zacks Analyst Blog Highlights: Kelly Services, NV5 Global, Limbach, MAXIMUS And First American Financial

For Immediate Release

Chicago, IL – July 3, 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: Kelly Services, Inc. (NASDAQ:KELYA) , NV5 Global, Inc. (NASDAQ:NVEE) , Limbach Holdings, Inc. (NASDAQ:LMB) , MAXIMUS, Inc. (NYSE:MMS) and First American Financial Corp. (NYSE:FAF) .

Here are highlights from Tuesday’s Analyst Blog:

U.S. Threatens More Tariffs on EU Goods: 5 Big Gainers

In response to aircraft subsidies, the United States is now considering the implementation of additional tariffs on products from the European Union. This will for certain embitter trade relations with the bloc at a time when the United States has agreed on a truce with China.

With the stock market is expected to gyrate on new tariff moves, it will be prudent to invest in service-oriented companies that remain unperturbed by trade-related issues.

Trump Administration Proposes Tariffs on EU Goods

President Trump recently said that trade talks with China have resumed, which eventually helped the stock market gain traction. Trump added that “farmers are going to end up being the great beneficiary” as hostility between the world’s largest economies have ebbed and that their economic relations are improving.

But, trade woes between the United States and its trading partners are far from over. The Trump administration has now proposed an additional $4 billion in tariffs on EU goods to bend a 15-year disagreement over aircraft subsidiary.

The United States is contemplating levying tariffs on European products, including olives, Italian cheese, Scotch whiskey, and some 86 other tariff sub-categories. In fact, such tariffs in particular will almost double or even triple the cost of olive oil. The United States had proposed tariffs on $21 billion of European products in April.

Trade wars are certainly not encouraged as they impede economic growth and squeeze corporate profits. Lest we forget, a trade war with China had cost $7 trillion, while the U.S. tech sector was losing nearly $1.3 billion a month.

Service Firms Are Big Gainers

Service firms are safe bets for now. Such firms are unruffled by trade retaliations as they have less foreign sales exposure compared to goods companies. Service stocks also incur lower foreign input costs that might be subject to tariffs. Such input costs are mostly related to direct materials, labor and factory overheads.

The service wing of the U.S. economy by the way picked up in May, recovering from a 20-month low. According to the Institute for Supply Management (ISM), the non-manufacturing index (NMI) came in at 56.9 in May, topping analysts’ estimates of a slight dip to 55.4. It was also higher than April’s two-and-a-half-year low of 55.5.

The non-manufacturing sector, thus, saw uninterrupted expansion for the 112th consecutive month, indicating that the broader economy is on track for steady growth this year. After all, the non-manufacturing sector accounts for nearly 90% of the economy, while any reading above 50 indicates that the said sector is expanding.

Notably, 16 of the 18 non-manufacturing industries reported expansion, led by education services, transportation and warehousing, utilities, real estate, finance & insurance, healthcare, construction, mining, retail trade, and information.

5 Solid Choices

We have, thus, selected five solid service stocks that should make meaningful additions to your portfolio. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a Zacks Investment Research

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Written By: Zacks Investment Research