The Zacks Analyst Blog Highlights: Walmart, Intel, Microsoft And Apple
Zacks Investment Research | Feb 09, 2020 09:07PM ET
For Immediate Release
Chicago, IL – February 10, 2020 – 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: Walmart Inc. (NYSE:WMT) , Intel Corporation (NASDAQ:INTC) , Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) .
Here are highlights from Friday’s Analyst Blog:
4 Stocks to Win Big from China’s Tariff Relief
Concerns about the coronavirus outbreak and its subsequent impact on businesses certainly dented investors’ sentiment. But markets got a shot of confidence from signs of progress in the Sino-American trade relationship.
China recently announced that it will trim tariffs on $75 billion worth of U.S. imports by half starting next week. Per China’s Ministry of Finance, 10% tariffs on some of U.S. commodities would be cut to 5%, while those with 5% tariffs will be trimmed to 2.5% starting Feb 14. China’s ministry added that “in order to promote the healthy and stable development of Sino-U.S. economic and trade relations” such a move was taken. What’s more, the ministry suspended tariffs on some of the products required for treating victims of coronavirus.
In fact, on the trade front, the United States and China had signed a preliminary trade deal, indicating a truce in the protracted trade war. President Trump along with Chinese Vice Premier Liu He had called the deal “a landmark agreement.” The phase-one trade deal cuts U.S. tariffs to 7.5% on about $120 billion China products.
The United States said that China has agreed to increase import of commodities in 2020. China has also agreed to protect U.S. intellectual property rights and has given the assurance of not manipulating its currency. To top it, Trump had said that that the latest trade agreements helped the broader stock market gain. After all, the Trump administration’s phase-one trade deal with China did lessen the burden on global economic growth created by trade imbalances, and in turn boosted factory activities.
Lest we forget, the United States and China together account for 35% to 40% of the world’s economy, and thus have a significant influence on international growth. And since the negotiations have gone well between the countries, business confidence has improved, driving capital expenditure and in turn the stock market. Trade economist Mary Lovely of the Peterson Institute for International Economics summed up by saying that “the U.S.-China phase-one deal is essentially a trade truce, with large state-directed purchases attached. The truce is good news for the U.S. and the world economy.”
Thus, the next obvious question is which are the best stocks to buy now given that China-U.S. trade war worries are dissipating? The answer is the same companies that suffered the most when the trade war started.
Walmart
Walmart Inc. engages in the retail and wholesale operations in various formats worldwide. The company operates through three segments: Walmart U.S., Walmart International and Sam’s Club. The world’s largest retailer should be a clear winner since trade issues have cooled off. After all, almost three-fourths of the merchandise sold in Walmart stores are manufactured in China. And any increase in the prices of goods it imports from China could easily dent Walmart’s bottom line.
Walmart is currently gaining from its sturdy comparable store sales (comps) record, which in turn is driven by its constant omnichannel efforts. The company has been posting positive comps in the U.S. division for 21 straight quarters.
The company currently has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has moved up 1.2% over the past 90 days. The company’s expected earnings growth rate for current and next quarter is 2.1% and 2.7%, respectively. You can see Zacks Investment Research
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