Investing Strategies For The Trade War

Running length 00:23:11

Welcome to Episode #177 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Zacks Chief Equity Strategist, John Blank, to discuss the escalation of the trade tensions between the United States and China.

Now that the United States has instituted the 25% tariffs, and China has retaliated with tariffs of their own, what are the implications for the global economy for the rest of this year?

Is a recession looming?

John’s answer might surprise you.

Wall Street: “Sell Now, Buy Back in Later”

For stock investors, however, it’s a tough environment.

Wall Street hates uncertainty. For now, Wall Street is selling and going to the sidelines. But at some point, the sentiment will change.

Investors will want to get back in.

Where do you hide out in the meantime?

Strategies for Stock Investing During a Trade War

There’s something to be said for having your business banned in China: you’re not impacted by trade tensions.

American social media and Internet stocks, with no direct business in China, might be a place to hide out. Those would be names like Facebook (FB - Free Report), Twitter (TWTR - Free Report) and Alphabet (GOOGL - Free Report).  

Additionally, investors could go the opposite route and buy Chinese stocks with no direct business in the United States, like the Chinese Internet giant Baidu (BIDU - Free Report).

But what about the big international stocks like Alibaba (BABA - Free Report)? There’s a lot of uncertainty as to what a trade war might do to its business if the Chinese economy slows.

What other industries should you be buying, or avoiding, over the next few months?

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Disclosure: The author of this article owns shares of FB and GOOGL in her personal portfolio.

Disclaimer: Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of ...

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Gary Anderson 6 months ago Contributor's comment

China has a much larger economy by PPP. Not sure Trump even understands what that is. It could bring his downfall.