What does a company that can weather the storm of tariffs and possible recession look like? It's a good question, and while there's still plenty of mystery as to what the US economy is about to do next, what is clear is that a few qualities make a company better able to ride this one out.
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Hey Snackers,
In the wee hours tomorrow, if you look up, you might see a smiley facein the sky as Saturn, Venus, and a crescent moon line up to create a very happy sight. You'll have to be up before the sun rises, but it should be visible from almost everywhere.
US stocks opened sharply higher after President Trump softened his stance on histwo most market-unfriendly policies after Tuesday's close. However, major indexes finished well off their highs of the day after Treasury Secretary Scott Bessent said that any relief on China would not be unilateral. The S&P 500 ended 1.7% higher, the Nasdaq 100 advanced 2.3%, and the Russell 2000 went up 1.5%.
What does a company that can weather the storm of tariffs and possible recession look like? It's a good question, and while there's still plenty of mystery as to what the US economy is about to do next, what is clear is that a few qualities make a company better able to ride this one out.
Take, for instance, Cava, the Mediterranean chain that's taken a bit of a hit this year but just yesterday was upgraded to an "outperform" rating by Bernstein analysts. While everyone else in the business world is doing everything in their power to avoid getting pinned down on a hard-and-fast forecast, what makes them so confident about Cava?
It's got good margins (at 25%) for its industry and is in good shape to maintain that even in the event of a recession.
It also doesn't import all that much, so tariffs probably won't affect Cava too much beyond maybe raising the costs of opening new locations.
Even then, its more affluent customer base will be able to better withstand any negative economic shocks: in the past, fast-casual concepts have tended to do better than the rest of the restaurant business when times get tough for that precise reason.
THE TAKEAWAY
So, there you have it: sell products that aren't imported to richer customers with fat margins and you'll do just fine, even if you're about as Mediterranean as EPCOT.
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Trump's 145% tariffs on Chinese imports to the US mean that companies are turning off the China-to-US trade spigot. But like a garden hose that wraps halfway around the world, it takes some time before the water stops flowing on our end.
A typical cargo ship filled with goods manufactured in China needs two to three weeks to travel to the Port of Los Angeles, the largest port in the US. About 40% of the imports arriving at that port originate from China.
After a flurry of panicked pre-tariff imports, we're about to see what it looks like when most imports from China stop coming. Famous brands are already reportedly halting all shipments and in a few short weeks, the number of vessels scheduled to arrive is really going to fall off a cliff, as this bleak chart shows. So stock up on those Stanley Cups now!
THE TAKEAWAY
This is a global trade war, but there are local implications as tariffs reduce port-related jobs. The math is easy: fewer containers mean fewer jobs at the port. In fact, according to the official stats, the port supports 136,000 jobs or 1 out of 14 workers in LA. The knock-on effects of fewer shipments will also hit land-based shipping, trucking, and more — the same data estimates the port supports 1.4 million jobs throughout the US.
Despite a tumultuous quarter, Tesla said on its earnings call that it's on track for its robotaxi launch in Austin this year. CEO Elon Musk also offered up some key details, including how many robotaxis will roll out on day 1 and a solid dad joke about its competitor, Waymo.
The biggest tech companies in the world face a basic dilemma: powering expanding data center operations while meeting net-zero targets.
Solarbank (Nasdaq: SUUN), an independent power producer, is equipped to help these major companies. With 100+ clean & renewable power plants under management, Solarbank's already helped corps like Honeywell transform industrial wastelands into thriving solar farms.
Data note: Starting with the Q2 2024 report, capacity additions for solar, wind and storage technologies are sourced from Wood Mackenzie data while all other technologies are sourced from the US EIA.
 
MOVES
Yesterday's Big Daily Movers
Trump's meme coinskyrocketed after an announcement that the biggest holders of the token would get a dinner invite from the president
CoreWeavesurged on news of a deal with Galaxy Digital
Navigating a turnaround, Boeingsoared on better-than-expected earnings
Earnings expected from Alphabet, American Airlines, Hasbro, Comcast, Procter & Gamble, PepsiCo, Merck, Southwest, Valero, Keurig Dr Pepper, T-Mobile, and Intel
Advertiser's disclosures:
1 Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal. Before investing, carefully assess whether a particular stock aligns with your investment objectives, risk tolerance, and financial situation.
 
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