Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into some of the latest U.S.-China trade war news. The episode then highlights five dividend-paying, mega-cap stocks that investors might want to buy as bond yields continue to slip around the globe.
Last Friday proved to be a crazy day on Wall Street. Federal Reserve Chairman Jerome Powell spoke in a highly anticipated speech in Jackson Hole. Powell clearly doesn’t seem ready to commit to the significant rate cuts that many, including President Trump, have called for. He also said that the ongoing trade dispute between the U.S. and China has made monetary policy a less effective tool.
The day then turned far more chaotic after China announced new tariffs on U.S. goods, which could impact U.S. automakers such as Ford F, Tesla TSLA, and many other companies. Trump then took to Twitter to attack China, saying “the vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing… your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States.”
Markets then tumbled to close the week, only to climb Monday after Trump seemed to back off some of his trade war remarks during the G-7 summit in France. Analysts and economists have tried to figure out when, or if, a deal will be struck. But instead of speculating, investors might consider searching for large-cap companies that pay a dividend, instead of staying on the sidelines.
The yield on one of the world’s safest assets, the 10-year U.S. Treasury note, currently rests at 1.53%. The yields hit their lowest level since August 2016 recently and are down from 2.1% in July and 3.2% last October.
Therefore, investors should consider taking a look at these five mega-cap stocks that offer a solid dividend yield and aren’t likely to be dramatically impacted by the U.S. and China trade uncertainty. Make sure you listen the podcast to find out why Verizon VZ, Coca-Cola KO, Microsoft MSFT, Comcast CMCSA, and McDonald's MCD all look like possible buys at the moment.
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