Stocks Fall on U.S.-China Trade and Tariff Fears & Buy Allegiant Stock - Free Lunch

On today’s episode of Free Lunch here at Zacks, Associate Stock Strategist Ben Rains breaks down the U.S. and China trade war as September’s tariffs kick in. Stocks, including giants such as Boeing BA, Caterpillar CAT, and 3M MMM, all fell as global economic slowdown fears start to impact the U.S. We also dive into why Allegiant Travel Company ALGT is a Zacks Rank #1 (Strong Buy) stock.

The first official trading day of September saw all three major U.S. indexes fall. Tuesday’s downturn came after a volatile August and followed the new round of tariffs that were imposed on Sunday. These new U.S. tariffs are set to impact more consumer-related goods, which could hurt retail spending in the vital holiday shopping period. For instance, J.P. Morgan JPM estimates the new consumer-facing tariffs will cost the average American household $1,000 a year.

Meanwhile, retaliatory Chinese tariffs on everything from soybeans to crude oil also went into effect. Plus, the Institute for Supply Management’s purchasing managers index fell to 49.1 in August. Investors should note that anything below 50 signals contraction.

On top of that, the U.S. trucking industry has been hit by the broader economic slowdown. And the Wall Street Journal reported that economic confidence for small U.S. companies slipped to its lowest levels since 2012.

Moving on, Wall Street might turn its attention to Slack WORK Wednesday afternoon. Shares of newly public work-based communication tech firm have fallen, in similar fashion to Uber UBER and Lyft LYFT and in contrast to Pinterest PINS and Beyond Meat BYND.

This episode of Free Lunch then closes with a look at why discount airline and travel company Allegiant Travel is a Zacks Rank #1 (Strong Buy) stock.

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