Wall Street is reeling under extreme volatility in May following an abrupt breakdown of the U.S.-China trade talks, which were at an advance stage, in the first week of May. The year-old tariff war resurfaced and the United States blacklisted Chinese tech behemoth Huawei Technologies from doing business with domestic companies.
Wall Street bull run, which continued in the first four months of this year and recorded the best start in 30 years, halted in May. The technology and industrials sectors were the predominant losers owing to their trade-sensitive business model. However, a few tech stocks have surged during May despite stock market volatility.
Trade Conflict Worsens
On May 28, President Donald Trump said that United States is not ready to make a deal with China as the Asian giant backtracked from its promises made earlier. He further added that tariffs on Chinese goods “could go up very, very substantially.”
So far, the U.S. government has imposed 25% tariffs on $250 billion Chinese goods while China retaliated by slapping 25% tariff on $170 billion of U.S. exports. Further, President Trump expressed his desire to levy 25% tariff on another $325 billion Chines products, which many industry watchers believe can be implemented by late this year or early next year.
Additionally, on May 15, the Trump administration blacklisted Chinese behemoth Huawei Technologies from doing business with U.S. counterparts. However, the government granted a 90-day window to U.S. companies to supply inputs to Huawei so that no existing user suffers immediately.
Wall Street Suffers Setbacks
The three major stock indexes –- the Dow, S&P 500 and Nasdaq Composite --- have plunged 4.7%, 5% and 6.4%, respectively so far in this month.
On May 23, yield on the benchmark 10-year U.S. Treasury Note, long-term 30-year U.S. Treasury Note and short-term 2-year U.S. Treasury Note tumbled owing to stock market uncertainty and concerns about a prolonged trade war.
Further on May 28, yield on 10-year U.S. Treasury Note fell further to 2.264%, its 19-month lowest level. Moreover, yields on long-term 30-year U.S. Treasury Note and short-term 2-year U.S. Treasury Note further declined to 2.075% and 2.127%, respectively.
However, yield on 3-month U.S. Treasury Note stayed at 2.356%, signifying partial inversion between 10-year and 3-month yield curves. Many economists consider this yield inversion as a sign of recession in the near future.
5 Tech Stocks Moving Higher
The recent concerns about U.S-China trade deal and consequently the global economic slowdown have not stalled growth of all technology stocks. We have been able to narrow down our search to five tech stocks, which have moved higher in the past month and still have upside left. All five stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
OptimizeRx Corp. OPRX provides digital health messaging services for pharmaceutical companies to communicate with healthcare providers. Its cloud-based solutions support patient adherence to medications by providing real-time access to financial assistance, prior authorization, education and critical clinical information.
The company has expected earnings growth of 273.3% for the current year. The Zacks Consensus Estimate for the current year has improved by 5.3% over the last 30 days. The stock has surged 43.2% in the past month.
Match Group Inc. MTCH offers subscription-based online dating websites and applications services. Its biggest and best known brands are Tinder, Match.com, PlentyOfFish, Meetic and OkCupid. The company offers dating products in 42 languages in more than 190 countries.
The company has expected earnings growth of 33.7% for the current year. The Zacks Consensus Estimate for the next year has improved by 26.2% over the last 30 days. The stock has surged 16% in the past month.
OSI Systems Inc. OSIS is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications in the homeland security, healthcare, defense and aerospace industries. Its Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation detection, and explosive and narcotics trace detection systems.
The company has expected earnings growth of 17% for the current year. The Zacks Consensus Estimate for the current year has improved by 5% over the last 30 days. The stock has gained 13.9% in the past month.
PCTEL Inc. PCTI delivers performance critical telecom solutions in the Asia Pacific, Europe, the Middle East, Africa and the Americas. It designs and manufactures precision antennas, which are used primarily in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in equipment and devices for the Industrial IoT.
The company has expected earnings growth of 121.7% for the current year. The Zacks Consensus Estimate for the current year has improved by 155.6% over the last 30 days. The stock has gained 9.1% in the past month.
Marchex Inc. MCHX is a leading mobile and online advertising company with in-depth specialization in call analytics that drives millions of consumers to connect with businesses over the phone, delivers the most quality phone calls in the industry, and provides details analysis of those phone calls.
The company has expected earnings growth of 16.7% for the current year. The Zacks Consensus Estimate for the current year has improved by 16.7% over the last 30 days. The stock has gained 6.5% in the past month.
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