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5 Growth Stocks to Buy as Middle-East Tensions Subside

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When the markets were expecting Middle-East tensions to intensify following Tehran’s retaliatory attack, President Donald Trump’s comment that America will not go for a full-on war and will instead embrace peace provided some relief to investors.

However, Trump added that additional economic sanctions will be imposed immediately on Tehran until the nation stops supporting terrorism and abandons its nuclear program. Precisely, the de-escalation in tensions between Washington and Tehran is likely to help Wall Street maintain its uptrend.

Middle-East Tensions De-escalate

After the recent U.S. airstrike killed Iran’s top commander General Qasem Soleimani in Baghdad, Tehran retaliated by firing more than a dozen ballistic missiles at U.S. troops in Iraq. Although Tehran’s retaliation initially shook the global market, Trump’s comment has calmed investors.

Trump said that the retaliatory attack hasn’t hurt American troops and that the United States will thus not take any military action.

Easing Trade War

Last December, Washington and Beijing agreed to the terms of a historic phase-one trade deal — likely to be signed on Jan 15, 2020. As part of the accord, the United States called off the Dec 15 implementation of 15% tariffs on $160 billion worth of China goods — comprising toys, laptops, cell phones and clothing. Beijing also didn’t proceed with the retaliatory tariffs of 25% on American autos that were set to go into effect on the same day.

Moreover, Washington has decided to halve the tariff rate levied on Sep 1 on a list of Chinese goods, worth $120 billion, to 7.5%. However, to leverage negotiations for the second phase in 2020, the United States has kept its 25% duty on $250 billion worth of Chinese goods in place.

In the next two years, Beijing will ramp up purchase of goods and services from Washington by at least $200 billion, added U.S. officials. The list of goods to be purchased comprises manufactured goods, agricultural goods and energy. With this, the U.S. officials believe that the country’s $419-billion trade deficit with China will be significantly lowered, which in turn will boost the nation’s GDP.

Precisely, Beijing has vowed to step up its purchases of agriculture products from Washington by $32 billion in the next two years. Apart from the agricultural purchases, the agreement covers issues like intellectual property protection and technology transfers.

Healthy Labor Market

The employment in the U.S. nonfarm private sector has picked up with the addition of 202,000 jobs in December — per the ADP National Employment Report — beating the economists’ expectation of 160,000, as polled by Reuters. ADP data also signifies that the American private sector has added the maximum number of jobs in eight months.

Apart from the solid job growth in December, ADP has made upward revisions to its November estimates from 67,000 to 124,000, reflecting America’s healthy labour market.

5 Growth Stocks to Make Merry

With the broader U.S. stock market rising on hopes of subsiding Middle-East tensions, the upward trend is likely to continue as easing trade tensions and a healthy labor market have been acting as catalysts. Thus, to outdo market returns as well as take advantage of the aforesaid factors, we have used the Zacks Stock Screener to narrow down on stocks with solid prospects, sporting a Zacks Rank #1 (Strong Buy) along with Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Duluth, GA, Asbury Automotive Group Inc (ABG - Free Report) is among the leading automotive retailers in the domestic market. The stock is expected to report 10.2% earnings growth for 2019. In 2020, the company is likely to see earnings growth of 18.5%.

Lithia Motors Inc. (LAD - Free Report) , headquartered in Medford, OR, is primarily involved in providing solutions related to personal transportations. The stock is likely to see earnings growth of 15.5% in 2020. For 2019, the company is expected to report earnings growth of 18.5%.

Headquartered in Irving, TX, Commercial Metals Company (CMC - Free Report) is a leading manufacturer of steel and metal products. In fiscal 2020, the stock is likely to see earnings growth of 15.4%.

Acushnet Holdings Corp. (GOLF - Free Report) , headquartered in Fairhaven, MA, is a leading manufacturer and distributor of golf products across the world. The company is expected to report earnings growth of 20.5% for 2019. The stock is likely to see earnings growth of 6.1% in 2020.

Headquartered in Houston, TX, MRC Global Inc. (MRC - Free Report) is primarily engaged in distributing pipe, valves and fittings (PVF) to the energy industry. In 2020, the stock is likely to see earnings growth of 24.4%. The company is also expected to have reported earnings growth of 7% in 2019.

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