The nearly 200-point rise in the Dow Jones today is more than meets the eye. The United States and China may have agreed on a "phase one" trade deal. But that's also set off a catalyst that could boost one of our best penny stocks to watch this week.
The world's two largest economies agreed on a "phase one" deal over the weekend. This will mean the paring-down of tariffs that had been scheduled to escalate on both sides. China suspended levees on U.S. corn and cars, and the United States called off an additional $160 billion of Chinese electronics and toys.
All the major indexes jumped on this news. In addition to the Dow's surge, the S&P 500 went up 0.7%, and the Nasdaq gained 0.8%.
It's great to know stocks are soaring at the beginning of the week. But it's not very useful to know after the fact.
Luckily, we have a system called the Money Morning Stock VQScore™ to let us know when stocks are set for a breakout. It scans the financials behind thousands of stocks and scores them from 0 to 4.9. If a stock gets a 4 or higher, it's in the "Buy Zone."
The penny stock we're talking about today has a perfect 4.9 VQScore. And it lines up perfectly with the news in China because it comes from an industry that is directly affected by this news.
There is still time to invest in this penny stock, but it could shoot up at any instant - the low share price of penny stocks translates to high and fast percentage shifts.
For example, Senmiao Technology Ltd. (NASDAQ: AIHS) rocketed 268% in November on just a $0.78 jump.
This week's top penny stock to buy trades for just $2.49, so it could see huge gains on just a few dollars of growth. Plus, it pays an incredible 8% dividend yield. Finding that kind of yield in a penny stock is unheard of.
And now that the United States and China are progressing with trade talks, this penny stock could break out very soon...
The Best Penny Stock to Watch This Week
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The canceled U.S. tariffs on China were on $160 billion in consumer goods, largely electronics.
This will be huge for the bottom line of Amsterdam-based telecom provider Veon Ltd. (NASDAQ: VEON).
Veon was only founded in 2009, but it has grown into one of the largest mobile network operators in the world: $9.78 billion in revenue and 214 million customers.
The company took a hit in April 2018, when the United States banned China's ZTE telecom equipment. Veon had several contracts with ZTE. And when ZTE's U.S. market was threatened, it rippled into several of Veon's global operations - they saw launch delays and network outages across the world.
When the ZTE ban was lifted three months later, the stock shot up more than 32%. And the company was able to get back on its feet.
The recent lifting of U.S. tariffs on consumer electronics is another step in this direction.
Now, in addition to having its global market share intact and being one of the largest telecom providers in the world, Veon isn't hobbled by U.S. tariffs on the world's leading telecom equipment exporting nation.
For that reason, it's poised for a 44% gain in share price very soon.
Veon is also one of the best dividend stocks on the market, delivering an 8.7% yield to shareholders. That's almost unheard of for a penny stock. For perspective, the average S&P 500 yield is around 2%.
That makes it a good stock to hold for the long haul, in addition to a solid growth stock.
What's great about this stock's growth is that, while the big catalyst is already past, it's not going to react immediately. There is still time to invest in Veon, because it's only secondarily affected by trade war news.
Unlike the Dow or the S&P 500, which capture the momentary whims of Wall Street investors, there will likely be a lag before this stock rises - and with a perfect 4.9 VQScore, that's almost certainly on the way.
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