Will we now go into a recession, something that interest rates are signaling by their plummeting in Thursday's bond trading?
Is it a forgone conclusion that will happen?
Here's what you need to do. You need to accept that the noose is tightening around China's neck. But you do not need to sell everything, and when things calm down, you will be able to buy stocks that have worked before the initial tariffs and will work again.
Let me give you my list of what will be buyable after all the technicians have gone negative and the strategists shave their S&P 500 targets.
First, tech. You will be able to buy non-cellphone-related tech that does well without an economy growing much here or anywhere else.
That's why you will be able to buy Alphabet (GOOGL) and Facebook (FB) and even Netflix (NFLX) , as they can't do business in China. The tariffs, arguably, make Amazon (AMZN) even more valuable as a cheaper alternative to more vulnerable brick-and-mortar stores.
Second, you can buy the stocks of businesses that have scale that are non-China that we know are doing well. Classic example? Yum! Brands (YUM) . The company reported Thursday. The numbers were spectacular and it shed its Chinese business several years ago. No hurry to buy. But be ready.
Similarly, I would be willing during the morass to consider Costco (COST) . It's not in China, and we know from the numbers we have seen for the last year, tariffs have no impact.
Drug companies with good dividends are a place to go to. Merck (MRK) had the best quarter by far of the drug companies. It is worth considering. So is Novartis (NVS) , which reported spectacular numbers.
Of course, anything utility will work. We just had Nick Akins, the CEO of American Electric Power, on "Mad Money", and while he did indicate that there is some slowing in the industrial economy, it will not hurt mighty AEP's ability to continue to deliver superior results.
You want growth tech that works in this environment? That means you want cyber security. You can reach for Cyberark Software (CYBR) , which protects the keys to the kingdom, or my favorite, Cisco (CSCO) , which has almost no Chinese exposure because CEO Chuck Robbins saw all of this coming and made a move to divorce his company from China when the whole fracas started.
Some brave souls will want to go to the cloud kings, perceiving that they have growth no matter what, and therefore should get even higher price-to-earnings multiples.
Strangely enough, you can go right back to fintech, because the large banks are always considered to be vulnerable under the theory that tariffs will lead to recessions, which will hurt their balance sheets.
You can buy the defense stocks just on a knee-jerk trade, and I bet it works. I know the stock of L3Harris (HRS) just had a nice move up. But it's still mispriced, and I like it the best of the lot.
Finally I would buy either Agnico Eagle Mines (AEM) or Barrick Gold (ABX) . We are going to continue to see buying in the precious metals, because the chaos trade will be in play for people who believe that there could be some real displacement of the order of things and that means safe-haven time.
Those are the two gold companies that I have the most confidence in. Those are the ones to buy.
Alphabet, Mastercard, Amazon, Cisco and Facebook are holdings in Jim Cramer's Action Alerts PLUS member club.