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Don't Like Volatility? Steer Clear of These 3 Stocks

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President Trump's threat to impose additional tariffs on $200 billion worth of Chinese goods has the U.S. stock market in a tizzy. 

All three major U.S. indices ended in the green, after the Dow Jones Industrial Average lost 473 points Tuesday. Stocks rebounded Wednesday, as the White House said it wants to work out a trade agreement with China. The volatility index hit 19 Wednesday, after sitting at 12 Friday, before Trump's weekend announcement about tariffs. 

Here's some advice for investors who don't like volatility. Stay away from these three stocks, for these reasons:

United Technologies

United Technologies (UTX) is down about 2.8% since Friday's close, as its an economically sensitive company, exposed to the impact of tariffs. With better trade news out Wednesday, it lead the Dow Jones Wednesday, gaining 1.65% to $137.67. Investors can simply look at the biggest losers and winners on the Dow Jones on days when the index moves significantly, especially on economically impactful news. That usually signals which stocks are most volatile. 


Nike (NKE) is down 2.7% since Friday's close, but up 1.01% Wednesday to $83.38 a share, as one of the larger gainers on the Dow Jones index. Nike did move a lot of its production to Vietnam, so it won't have to buy many materials with high tariffs coming into the U.S. from China to produce apparel. Still, it's exposed to China, as it's looking to grow sales in the region. If China retaliates with tariffs on American goods, that's clearly a negative for the company. Even without Chinese retaliation, if the U.S. economy slows because Trump's tariffs raise the price of goods, hurting demand, Nike, which sells relatively discretionary goods, could see its sales get hurt. 


Visa (V)  is one of the Dow Jones' largest gainers Wednesday. It closed Friday at $162 a share, then hit an intraday low Monday of $158 after the trade news, before bouncing back to $161.68 Wednesday. Like Nike, if the U.S. economy slows a bit because of tariffs, a slowdown in consumer spending will almost certainly be a drag on Visa's revenue

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Another Dow component has a big week ahead:

Disney (DIS)  , Real Money's stock of the day, reports earnings Wednesday, and investors are looking for more clarity on its streaming ambitions, which many analysts say will power the stock long-term. 

Related. Wall Street Remains Optimistic About Disney Amid 2019 Stock Surge

Disney is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells DIS? Learn more now.

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