U.S. markets have rallied since Donald Trump's presidential victory on Nov. 8 and are now trading near record highs. That's why we're unveiling three new Trump stocks to buy now.
While many investors have piled into infrastructure and defense stocks since the election, Money Morning Chief Investment Strategist Keith Fitz-Gerald has found three different stocks that could all climb thanks to Trump's presidential win.
Before we get into the stocks to buy, here's a brief look at why the markets could continue higher...
Why the Stock Market Keeps Rallying
The Dow has climbed more than 9% since the election and is closing in on 20,000. Just yesterday, the index hit a record high of 19,953.75. The S&P 500, Nasdaq, Russell 2000, and Dow Transports are all trading near record highs, too.
Meanwhile, Fitz-Gerald has his investment sights set overseas - on China to be exact, which might seem strange to many.
You see, Trump has criticized China. Trump maintains the Asian nation hasn't played by the rules and that he is going to do something about it. But Fitz-Gerald notes the president-elect's acceptance of a congratulatory call from Taiwanese President Tsai Ing-wen was potentially a very profitable move for investors.
Here's why...
The Asian nation is home to 1.6 billion people and an increasingly more affluent middle class of more than 600 million. Chinese consumer consumption is growing double digits and at a clip that's more than double its GDP growth.
Flush with cash, eager to spend, and with a desire for what's "in," Chinese consumers and stocks with a leading presence there cannot be ignored.
"Simply put, anybody who bets against China long term is asking for trouble," Fitz-Gerald said. He adds that China is just coming up to speed, "which is why you want to find a way to play along."
Here's how Fitz-Gerald says to play the country that has boasted the world's largest economy for 18 out of the last 20 centuries. These are our three newest "Trump stocks" to buy...
3 Trump Stocks to Buy Now
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Trump Stocks to Buy No. 1: Alibaba
Alibaba Group Holding Ltd. (NYSE: BABA) is a China-based e-commerce and mobile pay goliath. Other businesses include cloud computing, digital media and entertainment, innovation initiatives, and more. Via affiliates, Alibaba also participates in the logistics and local services sectors. The company's mission is to make it easy to do business anywhere.
The company's highly anticipated Singles' Day, the single-biggest global e-commerce day of the year, smashed all records on Nov. 11. Sales were up 32% year over year (YOY). Retailers on Alibaba's platforms recorded $17.8 billion worth of gross merchandise volume (GMV) in just 24 hours. In 2015, the 24-hour e-commerce sales event racked up $14.3 billion in GMV in total.
Alibaba also continues to expand its cloud unit, which grew 130% YOY in Q3. Late last month, Alibaba Cloud announced the opening of four new data centers by the end of 2016 in the Middle East, Europe, Australia, and Japan. This marks a major milestone for Alibaba Cloud's global expansion. The new centers will boost its data center network to 14 locations, covering key economic centers around the world.
In October, the company's finance arm demonstrated a payment service that will allow virtual reality shoppers to pay for things in the future just by nodding their heads. The new payment system, called VR Pay, is part of Alibaba's efforts to capitalize on the latest technology in online shopping. In 2015, it introduced a facial recognition technology for Alipay's mobile payments service touted as "pay with a selfie."
BABA also posted strong Q3 results and gave upbeat guidance last month. At $92.66, BABA shares are up 14.02% year to date.
Trump Stocks to Buy No. 2: Baidu
Baidu Inc. (Nasdaq: BIDU) is a leading Internet search giant based in China. It offers a Chinese language search platform on its Baidu.com website. The company also provides transaction services, such as Baidu Nuomi, Baidu Takeout Delivery, Baidu Maps, Baidu Connect, Baidu Wallet, and others.
Baidu has recently ventured into the explosive autonomous vehicle space. Baidu aims to commercialize self-driving cars on a small scale by 2018, with wider deployment by 2021.
In late October, Baidu reported Q3 results that handily beat expectations. Earnings per share (EPS) of $1.49 came in $0.39 ahead of projections. Mobile revenue represented 64% of total revenue, up from 54% for the same period in 2015.
GMV for transaction services totaled 19.4 billion RMB ($2.9 billion), a 49% YOY increase. Baidu Wallet activated accounts reached 90 million at the end of September 2016, a whopping 99% YOY increase.
At $168.96, BIDU shares are down 10.67% year to date. Yet over the last five years, shares are up 29.37%.
Trump Stocks to Buy No. 3: Starbucks
Starbucks Corp. (Nasdaq: SBUX) has more than 24,000 retail stores peppered across 70 countries.
Starbucks has expanded its offerings over the years. It now offers handcrafted hot and cold beverages, fresh food, coffee and tea brewing equipment, and merchandise.
Earlier this week, Starbucks presented a five-year growth plan that includes growing revenue by 10%, increasing EPS by 15% to 20%, and driving mid-single-digit comp growth each year. Roasteries and Starbucks Reserve stores are projected to elevate the Starbucks brand and customer experience. And innovation is expected to further accelerate the momentum of the company's digital and mobile ecosystem.
The company aims to add 12,000 stores globally to a total of 37,000 by 2021. By 2020, Starbucks' goal is to have 5,000 stores dotted across China.
Starbucks opened its first store in China 17 years ago, and it has been a long and arduous road for the java giant. The company had to educate the predominately tea-consuming Chinese population about the virtues of coffee, as well as introducing palates to the caffeinated brew.
Critics maintained Starbucks would never make money there. But the company's patience and persistence paid off.
"If you look five years ago, most of our business, believe it or not, was expats and tourists in China," CEO Howard Schultz told CNN in October. "Today, it's mostly Chinese."
At $58.61, SBUX shares are off 2.37% year to date, along with the pressured fast-casual restaurant space. But long-term results tell a much different story. SBUX shares are up 53.55% and 166.74%, respectively, over the last three and five years.
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