President Donald Trump announced a “national economic emergency” on Wednesday as he unveiled sweeping reciprocal tariffs to tackle America’s $1.2 trillion trade deficit. The tariffs appear strategically planned, as the announcement was made after markets closed.
Stocks ended higher ahead of the announcement. However, the Dow futures plummeted over 800 points or 2%, while the S&P 500 futures and the Nasdaq 100 futures ended 2.7% and 3.6% lower, respectively. Markets are bracing for massive turmoil, apprehending a global trade war triggered by Trump’s reciprocal tariffs.
Given this situation, it would be ideal to invest in safe-haven stocks like utilities, consumer staples and healthcare that are considered defensive. In this regard, Southwest Gas Holdings, Inc. SWX, CMS Energy Corporation CMS, Molson Coors Beverage Company TAP,Sony Group Corporation SONY and Cardinal Health, Inc. CAH are lucrative buys. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The stocks are also from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank.
Trump, on Wednesday, didn’t spare any of the United States’ trading partners after he imposed a baseline 10% tariff on all countries which will go into effect on April 5. He mentioned additional “reciprocal” levies on multiple nations that the administration considers the worst offenders, like Japan, Israel and EU members, effective April 9.
“We will charge them approximately half of what they are and have been charging us,” Trump said while unveiling the tariffs from the White House Rose Garden. “So, the tariffs will be not a full reciprocal.”
The newly implemented 10% baseline tariff is roughly three times the average U.S. tariff rate prior to Trump’s return to the White House in January.
Stocks rallied on Wednesday prior to Trump’s announcement, as investors were optimistic that the reciprocal tariffs would not be too harsh, for this could push the economy into a recession and further raise inflation levels. However, markets are now preparing for a bigger turmoil after the shock announcement made by Trump.
Trump’s tariff plan is aimed at bringing back production to the United States and boosting the manufacturing sector, but the aggressive stance is paving the way for a global trade war.
Markets have been suffering since February, with the Nasdaq and the S&P 500 entering correction territory. Also, inflation has been escalating over the past few months and now bears the risk of shooting higher. This could compel the Federal Reserve to delay its next interest rate cut for a longer period.
Southwest Gas Holdings, Inc. is a regulated utility that provides natural gas services and has a wholly owned subsidiary, the Paiute Pipeline Company, through which it operates a pipeline transmission system. SWX makes deliveries of natural gas under a priority system established by state regulatory commissions, which targets higher-priority customers, primarily residential customers, while other customers who use 500 therms or less of gas per day are given greater importance.
Southwest Gas Holdings has an expected earnings growth rate of 17.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the past 60 days. SWX currently has a Zacks Rank #2. Southwest Gas Holdings has a beta of 0.50 and a current dividend yield of 3.45%.
CMS Energy Corporation is an energy company. CMS is the parent holding company of Consumers, an electric and gas utility, and NorthStar Clean Energy, a primarily domestic independent power producer and marketer.
CMS Energy Corporation has an expected earnings growth rate of 7.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. CMS currently carries a Zacks Rank #2. CMS Energy Corporation has a beta of 0.34 and a current dividend yield of 2.89%.
Molson Coors Beverage Company, the global manufacturer and seller of beer and other beverage products, has an impressive diverse portfolio of owned and partner brands. TAP’s brands include global priority brands such as Blue Moon, Miller Lite, CoorsBanquet, Coors Light, Miller Genuine Draft and Staropramen, as well as regional champion brands like Carling and Molson Canadian.
Molson Coors Beverage Company’s expected earnings growth rate for the current year is 6.2%. The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the past 60 days. TAP presently has a Zacks Rank #2. Molson Coors has a beta of 0.69 and a current dividend yield of 3.07%.
Sony Group Corporation designs, manufactures and sells several consumer and industrial electronic equipment. SONY’s product roster comprises audio and video equipment, televisions, network services, game hardware and software, mobile phones and image sensors.
Sony Group Corporation’s expected earnings growth rate for the current year is 11.9%. The Zacks Consensus Estimate for current-year earnings has improved 4.3% over the past 60 days. SONY presently sports a Zacks Rank #1. Sony Group Corporation has a beta of 0.94 and a current dividend yield of 1.84%.
Cardinal Health, Inc. is aglobal healthcare services and products distributor to hospitals, healthcare providers, pharmacies, and manufacturers. CAH operates under three segments: Pharmaceutical and Specialty Solutions, Global Medical Products and Distribution, and Other.
Cardinal Health’s expected earnings growth rate for the current year is 5.4%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. CAH presently carries a Zacks Rank #2. Cardinal Health has a beta of 0.61 and a current dividend yield of 1.47%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
CMS Energy Corporation (CMS) : Free Stock Analysis Report
Molson Coors Beverage Company (TAP) : Free Stock Analysis Report
Southwest Gas Corporation (SWX) : Free Stock Analysis Report
Sony Corporation (SONY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.