The day of tariffs has finally arrived. Stocks around the world reacted quite negatively, not in celebration of Liberation Day, as the reciprocal tariffs were deemed to be the worst case scenario for some countries. Fears of reciprocal tariffs turning into a trade war are no longer just hypothetical. Still, investors are flocking to stocks that they believe are relatively immune to the noise around tariffs.
Some stocks are actually surging despite the S&P 500 falling over 3.5% and breaking under the 5,500 mark for the first time since last September. The S&P 500 is now down almost 7% year-to-date and the tech-dominated NASDAQ-100 is now down almost 11% year-to-date.
The reason that defensive stocks are surging is because of “strategic investors” always looking for somewhere to park their money outside of cash.
The Trump administration is setting the incoming goods tariff at 54% on China. It is also set at 26% on India and 46% on Vietnam – with many nations facing 10% tariffs on incoming goods into the United States market.
Oggonomics has put together a list of roughly 20 companies from the S&P 500 that the market is judging to be immune to tariffs. Whether these are truly immune will remain to be seen. That won’t stop investors and speculators from placing their bets as such.
Keep in mind that these are one-day reactions and not all of these companies will win in time. And some of these companies will also potentially face additional pressure outside of tariffs as new policies get passed down by the administration.
Molina Healthcare Inc. (NYSE: MOH) is the top performer of the S&P 500 with effectively all plans here in the U.S. It was up 6.99% at $351.45. Centene Corp. (NYSE: CNC) was behind it in healthcare plans, up 4.4% at $63.40.
Lamb Weston Holdings Inc. (NYSE: LW) finally has little worries beyond people eating fewer meals dominated by potatoes. It was up 6.4% at $57.62.
Kroger Co. (NYSE: KR) may not be immune from foreign goods entirely, but hey — you gotta eat, and it’s cheaper to eat at home than out! Kroger was up 5% at $70.65.
MarketAxess Holdings Inc. (NASDAQ: MKTX) is still going to see plenty of trading, apparently. It was up 4.9% at $221.17 on Thursday. CBOE Global Markets Inc. (CBOE: CBOE) was also up 3.65% at $232.70.
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SBA Communications Corp. (NASDAQ: SBAC) provides cellphone towers and wireless communications. Maybe it has to pay more for infrastructure down the road, but people aren’t going to stop using their mobile devices with or without tariffs. SBA Communications was up 4.9% at $230.08. The larger American Tower Corp. (NYSE: AMT) was up 4.6% at $228.02 and Crown Castle Inc. (NYSE: CCI) was up 2.5% at $106.45.
American Water Works Co. Inc. (NYSE: AWK) is the largest US water utility. Are you going to stop drinking water and showering because of tariffs? American Water Works was up 4.8% at $153.20. Consolidated Edison, Inc. (NYSE: ED) was up the most of the other utilities in the S&P 500 with a gain of 3.4% at $113.35. Exelon Corp. (NYSE: EXC) was right behind with a 3.2% gain to $47.45.
Philip Morris International Inc. (NYSE: PM), which deeply considered a “consumer defensive” leader in international tobacco and other forms of nicotine. It was up 4.2% at $162.70. Altria Group Inc. (NYSE: MO) was up 3.6% at $59.20.
Mondelez International Inc. (NASDAQ: MDLZ) is considered a consumer defensive play as well, up 3.8% at $68.65.
First Solar, Inc. (NASDAQ: FSLR) may be a surprise with solar and the administration wanting cheap energy over green energy. It was up almost 3.7% at $134.57.
The Coca-Cola Co. (NYSE: KO) is another consumer defensive play (owned heavily by Warren Buffett) up 3.6% at $73.91. PepsiCo Inc. (NYSE: PEP) was right behind in the investor taste-test challenge with a 3.2% gain to $153.89.
Colgate-Palmolive Co. (NYSE: CL) was the top dog in consumer defensive base consumer products, up 3.5% at $96.80. Church & Dwight Co., Inc. (NYSE: CHD) was number 20 in the S&P 500 with a 3.2% gain to $111.76.
It remains unknown if any company is truly immune from tariffs or not. There are times that investors go after defensive stocks because that’s just where they want to hide out in periods of uncertainty. And then again, some companies (including some of these) may prove to be the ultimate safe haven in times of fear and still offer gains when times are good too.
Just don’t forget one thing — if and when the tariff news starts to reverse course, or as the market begins to adjust, the top performing defensive stocks are not where strategic investors are likely to stay. They will probably jump into the most economically sensitive stocks and the ones which have been beaten down the most from the macro uncertainty.
