A global trade war has erupted, sparking fears about economic stagnation. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have dropped about 2% this week. However, low-volatility stocks like Apple and AbbVie are seen as winners in this scenario. According to Evercore ISI, these stocks outperformed during similar trade tensions in 2018.
Evercore’s senior managing director Julian Emanuel notes that “defense remains the best offense.” He identifies several “trade war heroes” – Russell 3000 stocks with low volatility and buybacks – including healthcare giants like AbbVie, Centene, Humana, DaVita, and UnitedHealth Group. These companies are generally considered defensive hedges, holding up better during an economic slowdown.
AbbVie has seen significant gains this year, up 17%, while DaVita’s shares have dropped about 4%. However, a recent chart analysis suggests DaVita could see strong long-term performance compared to the S&P 500. Apple is also listed as a strong defensive pick, with its shares down about 4.7% this year.
Defense stocks Booz Allen Hamilton and Lockheed Martin are also considered safe havens during this trade war. Despite concerns about reduced defense spending, these companies are less tied to market performance due to their dependence on government budgets and war-related activities.
Source: https://www.cnbc.com/2025/03/04/best-stocks-to-own-during-a-trade-war-according-to-evercore-isi.html