Trade War! Every stock is finished. This is the end -- the end, my friend. Almost a Doors funeral dirge.
We got a reprieve this weekend, but we all know that that is the stock market's attitude after every bit of Trump's tough trade talking and tweeting. Except ... don't tell these 15 sectors that that's the case.
Yep, I have 15 groups that have been staggeringly unaffected by Chinese tension. In fact, every time it looks worse, these are the stocks it looks better for a few days later.
These are the new winners in a market that increasingly trades on President Trump's trade policy. And there are some very surprising performers there, indeed.
So without further ado, here are the first eight of my "lucky 15." I'll talk about the remaining seven a little later Monday:
1) Telcos
We've seen Verizon (VZ) start to lift -- which I think is in part defensiveness and in part lower interest rates, but also due to its pure domestic exposure. ATT (T) has also started to act better despite the travails of the antitrust trial over its proposed purchase of Time Warner (TWX) . And even high-yielding Centurylink (CTL) , thought to be an impossible investment with a 12% yield, is looking up.
2) Mall-Based Retailers and Apparel Makers
Now this one's a shocker, because we keep hearing that these stocks will be big losers in any trade war because so much of their business is linked to Chinese sourcing.
But that's definitely not the case, or if it is, they can quickly move away from Chinese good. Not only that, but even concerns that the Chinese will put tariffs on their goods seems totally untrue. Why else would Nike (NKE) and PVH Corp. (PVH) -- both with big Chinese businesses (12% and 11%, respectively) -- be doing so well?
The list of similarly unaffected apparel makers is incredibly long. VF Corp. (VFC) , Tapestry (TPR) , Michael Kors Holdings (KORS) , Ralph Lauren Corp. (RL) all stand out.
And retailers that are doing well include Abercrombie & Fitch (ANF) and American Eagle Outfitters (AEO) , often thought to be buyers of Chinese-made goods. The dollar stores also stand out even though they're huge Chinese-products purchasers (maybe the biggest).
Macy's (M) , Dillard's (DDS) , Ross Stores (ROST) , Burlington Stores (BURL) and TJX Cos. (TJX) are also all doing fabulously. The money is pouring into these names even as Home Depot (HD) , Lowe's (LOW) , Walmart (WMT) and Costco (COST) all trade like Chinese stocks.
3) Cloud Kings
Adobe (ADBE) , Red Hat (RHT) , Splunk (SPLK) and Salesforce.com (CRM) had all been pretty remarkable until Friday. And while ServiceNow Inc. (NOW) looks like it's stalled, it's nothing like any of the hardware or social-media stocks (even though we know the latter haven't even been allowed into China).
4) Cell Towers
This group seems immune to everything. American Tower Corp. (AMT) , Crown Castle (CCI) , SBA Communications (SBAC) -- put these stocks at the top of the buy list in any gigantic domestic sell-off.
Even though some have overseas businesses (like American Tower), these stocks trade as if the mergers are done and the bandwidth needs are extreme.
5) Hospitals and Health Insurers
What can I say? Anthem Inc. (ANTM) and Humana (HUM) look terrific. The latter might even be doing a merger deal with Walmart.
But how about Centene (CNC) and UnitedHealth Group (UNH) ? These stand out like beacons in any big sell-off. I would big underneath for these, as they're heavy into the S&P 500. So, let someone sell you these stocks below where the names should be.
I've spent a lot of time on Centene and some with UnitedHealth (a holding of my Action Alerts PLUS charitable trust). Both of their numbers are too low, so the stocks are great places to be.
Or how about Tenet Healthcare (THC) and HCA Healthcare (HCA) , two survivors of the failure to repeal and replace so-called Obamacare? They're almost child's play in the hands of a Chinese downturn. That's how strong they are.
6) U.S. Oil Companies
The domestic oils are holding up. I would cite four -- Marathon Oil (MRO) , Hess Corp. (HES) , Pioneer Natural Resources (PXD) and Anadarko Petroleum (APC) -- as the best places to be.
Now, I don't personally care for the oils any more. Their long-term prospects are increasingly being capped by the drive to electric vehicles, the lack of a market for their natural gas and the nature of younger portfolio managers who treat them like tobacco stocks.
They've also been crushed by the endless assault on MLPs, which look like broken investments to me. But if you find companies with lots of oil and a decent oil/gas ratio, you have winners.
7) Oil Refiners
Refiners have come on strong, and why shouldn't they? No exposure to China whatsoever, and great beneficiaries of the Permian glut (which has given them a chance to profit from huge spreads).
This is a remarkable time for Marathon Petroleum (MPC) , Valero Energy (VLO) and HollyFrontier (HFC) . I wouldn't even wait for a Chinese downturn to buy these, because as the glut of Permian oil grows, so do their gross margins.
8) Real Estate Investment Trusts
REITs are back! Now, some of that is because rates seem to be headed lower, while there's also a natural investor bias toward REITs here because they're all-domestic.
I don't really need to be specific, as everything from mall REITs to apartment REITs, home REITs and healthcare REITs bottomed out when rates started going lower and U.S./Chinese trade issues surfaced.
