This week, Zacks Equity Strategist Mayur Thaker, CFA, discusses:

• The current state of the trade wars and how to navigate them. He encourages investors not to fear tariffs and believes there will be further negotiations. As a result of these negotiations unveiled on “Liberation Day,” Mayur’s believes the trade wars will end with a hybrid of tariffs and free trade.

• Mayur believes tariffs will have a positive result in the long run by bringing jobs back to the U.S., raising substantial revenue for the government, and opening new geographic markets for U.S. companies to sell to. However, he indicates these positive gains will require short-term pain. Mayur dives into Robert Shiller’s CAPE yield spread and believes valuation will be the leading headwind for market returns.

• He ends the call with an overview of U.S. employment and believes there is a low probability of a recession. But with exaggerated valuations, he remains bearish on U.S. stocks and encourages investors to stay defensive with the Zacks Earnings Certain Proxy, comprised of durable, moat-protected companies, including Costco (COST), American Tower (AMT), Mettler Toledo (MTD), and more. Don’t miss this timely overview of the trade war environment.

The views of Mayur Thaker, CFA are not necessarily the views of Zacks Investment Research.

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