5 Stocks to Ride Out Renewed U.S.-China Trade Tension

On the trade front, the United States and China have been at loggerheads since 2018, after slapping higher tariffs on each other’s goods. Both the economic giants have decided to sit down and restart trade negotiations, but China recently canceled its U.S. farm tour after President Trump said that he will settle for a “complete deal” only. This created volatility in the market as investors sensed that the trade war isn’t ending anytime soon.

Trade Dampens

After months of tussle and imposing millions of dollar worth tariffs on each other’s products, both United States and China had finally exchanged “gestures of goodwill” at the beginning of September. China had removed tariffs on 16 U.S. goods and agreed to purchase more soybeans and pork without rising tariffs. To reciprocate the act, President Trump had delayed an additional tariff imposition by 15 days.

Both the economic superpowers had also agreed to hold a “delegate-level” talk in September before the “principal-level” negotiations begin in October. The talk was held on Sep 19-20 at Washington and as a “goodwill” gesture representatives from Beijing were supposed to take a farm tour in Montana and Nebraska.

But on Sep 20, the Montana Farm Bureau Federation received a message from the Chinese embassy that the delegates “had an adjustment of their agenda” due to which the farm tour would be canceled. Similar information was received by the Nebraska Department of Agriculture.

Investors now anticipate that this halt in talks would certainly damage the progress in trade that took place in recent times, and now the scope of improvement seems improbable. Noticeably, there has been a negative impact of the trade war on both cpuntries’ economy, and businesses had to pull back investments while waiting for Trump to give positive signals on the trade front.

5 Stocks to Buy

The U.S.-China trade turbulence seems to be burning the economy gradually, and dragging the stock market down. And with trade-sensitive stocks suffering badly, investors are looking for stocks that are immune to trade.

Here, consumer staples’ stocks come into play as their products are in constant demand, irrespective of market volatility. Hence we have selected such stocks that flaunt a Zacks Rank #1(Strong Buy) or 2 (Buy) and have outperformed their respective industries.

Pilgrim's Pride Corporation PPC is a publicly traded fresh chicken retail line that sells chicken across the United States, Mexico and Puerto Rico. Pilgrim Pride’s expected earnings growth rate for the current year is 53.9%, beating the industry’s estimate of 20.7%. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days.

The company has outperformed the Food – Meat Products industry over the past one-year period (+62.5% vs + 28.4%). Pilgrim Pride carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Scholastic Corporation SCHL is a publicly traded publisher and distributor of children’s books, educational technology and children’s media. Scholastic’s expected earnings growth rate for the current year is 19.4%, higher than the industry’s estimate of 2.6%. The Zacks Consensus Estimate for current-year earnings has improved 44.9% over the past 60 days.

The company has outperformed the Publishing - Books industry over the past one-month period (+16.8% vs + 5.8%). Scholastic sports a Zacks Rank #1.

 
J & J Snack Foods Corp. JJSF is a publicly traded manufacturer, marketer  and distributor of snack foods and frozen beverages for the food service and retail supermarket industries. J & J Snack Foods’ expected earnings growth rate for the current year is 22.7%, above the industry’s estimate of 4.8%. The Zacks Consensus Estimate for current-year earnings has improved 1% over the past 60 days.

The company has outperformed the Food - Miscellaneous industry over the past one-year period (+30.7% vs -1.6%). J & J Snack Foods carries a Zacks Rank #2.

Medifast, Inc. MED is a publicly traded manufacturer and distributor of clinically proven healthy living products and programs. Medifast’s expected earnings growth rate for the current year is 48.5%, above the industry’s estimate of 4.8%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days.

The company has outperformed the Food - Miscellaneous industry over the past one-month period (+5.4% vs +3.0%). Medifast has a Zacks Rank #2.

MGP Ingredients, Inc. MGPI is a publicly traded company that produces and markets ingredients and distillery products to the packaged goods industry. MGP Ingredients’ expected earnings growth rate for the current year is 22.1%, beating the industry’s estimate of 4.8%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days.

The company has outperformed the Food - Miscellaneous industry over the past one-month period (+14.3% vs +3.0%). MGP Ingredients carries a Zacks Rank #2.

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Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
 
MEDIFAST INC (MED) : Free Stock Analysis Report
 
MGP Ingredients, Inc. (MGPI) : Free Stock Analysis Report
 
J & J Snack Foods Corp. (JJSF) : Free Stock Analysis Report
 
Scholastic Corporation (SCHL) : Free Stock Analysis Report
 
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