On May 13, trade tensions took a heavy toll on
U.S. stocks once again. The Dow and the S&P 500 suffered their
worst losses since Jan 3, triggered by Chinaâs decision to impose
retaliatory tariffs on American goods worth $60 billion. While some
conciliatory noises emerged from the White House, Chinaâs
state-sponsored media adopted an abrasive tone on the simmering
Meanwhile, key members of the Federal Reserve
stated that the American economy is much stronger relative to
China. And investors should focus on its resilience and ignore
medium-term turbulence in the equity markets. This is why it makes
sense to invest in select consumer discretionary stocks at this
Kashkari, Rosengreen Emphasize US
According to Minneapolis Fed President Neel
Kashkari, the United States holds the edge in its trade conflict
with China. Despite the continuing slide in equity markets,
Kashkari believes major economic metrics remain stable as the trade
war intensifies. Speaking to CNBC, he said, the United States âis
in a very strong positionâ compared to China.
Firstly, the U.S. economy is much larger and âis
much less sensitive to trade.â On the other hand, much of Chinaâs
prosperity is linked to the export-driven nature of its economy. In
fact, exports make up a much-larger chunk of the economy compared
to the United States. This is why the United States has the
advantage in a retaliatory battle of escalating tariffs.
Boston Fed President Eric Rosengreen echoed
Kashkariâs views on Americaâs economic strength. He said that if
the trade conflict was short lived it would have little impact on
the U.S. economy. Rosengreen also thinks that the domestic economy
is robust enough to âwithstand the trade issues that are coming up
Economic Indicators Remain
U.S. GDP increased at 3.2% in the first quarter
of 2019, exceeding the consensus estimate of 2.1% by a wide margin.
The figure is also significantly higher than the pace of 2.2%
recorded in the last quarter of 2018. This is also the first time
since 2018 that first-quarter GDP has breached the 3% barrier.
(Read: 5 Consumer Discretionary Stocks to Buy as Q1 GDP Surges)
Meanwhile, the unemployment rate declined from
3.8% to 3.6% in April. This is the lowest level registered since
December 1969 and significantly better than the estimated rate of
3.8%. Also, the economy added 263,000 jobs last month. This marks
the 100th consecutive month of job growth for the U.S. economy.
(Read: Unemployment Hits 50-Year Low: 6 Business Services
Factory orders rebounded in March, increasing
1.9%. This is the largest increase experienced since August 2018.
Strong demand for transportation equipment was the primary reason
for the resurgence in factory orders. An increase in orders for
electronic equipment and computers also contributed to Marchâs
Comments from top Fed officials indicate that the
U.S. economy remains robust in the midst of significant equity
market turbulence. This is why it holds the edge in a likely
protracted trade war with China. These statements are borne out by
recently released data, which serve to underline Americaâs economic
Investing in consumer discretionary stocks, the
powerhouse of the U.S. economy remains prudent at this time.
However, picking winning stocks may be difficult.
This is where our VGM
Score comes in. Here V stands for Value, G for Growth and M
for Momentum and the score is a weighted combination of these three
scores. Such a score allows you to eliminate the negative aspects
of stocks and select winners. However, it is important to keep in
mind that each Style Score will carry a different weight while
arriving at a VGM Score.
We have narrowed down our search to the following
stocks, each of which has a Zacks Rank #1 (Strong Buy) and good VGM
Score. You can see the complete list of todayâs Zacks
#1 Rank stocks here.
G-III Apparel Group, Ltd. GIII
is a leading manufacturer and distributor of apparel and
accessories under licensed brands, owned brands and private label
G-III Apparel Group has a VGM Score of A. The
companyâs expected earnings growth for the current year is 15.3%.
The Zacks Consensus Estimate for the current year has improved by
6.5% over the last 60 days.
Comcast Corporation CMCSA is a
global media and technology company with three primary businesses:
Comcast Cable, NBCUniversal and Sky.
Comcast has a VGM Score of B. The companyâs
projected growth rate for the current year is 14.4%. The Zacks
Consensus Estimate for the current year has improved by 3.3% over
the last 30 days.
Marine Products Corporation MPX
designs, manufactures and distributes recreational fiberglass
Marine Products has a VGM Score of B. The Zacks
Consensus Estimate for the current year has improved by 6.6% over
the last 30 days.
Johnson Outdoors Inc. JOUT is a
designer, manufacturer and marketer of diving, camping, watercraft
and marine electronics products.
Johnson Outdoors has a VGM Score of B. The
companyâs projected growth rate for the current year is 1.5%.
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Comcast Corporation (CMCSA)
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Johnson Outdoors Inc.
(JOUT) : Free Stock Analysis Report
Marine Products Corporation
(MPX) : Free Stock Analysis Report
G-III Apparel Group, LTD.
(GIII) : Free Stock Analysis Report
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