Need To Know: Why Its Worth Holding U.S. Stocks Even If Trade Strife This Summer Frays Your Nerves

Congrats to those scrappy D.C. hockey players, who have produced some of the few cheerful headlines out of the U.S. capital lately.

But in markets, the mood is risk-off, with worried investors running for the exit as Trump hits Twitter with a fusillade of trade barbs aimed at erstwhile friends Canada and France. Trump himself, who loves nothing more than a win, is said to be leaving the G-7 summit early, setting the whole event in Quebec up for failure.

Attempting to calm your nerves is our call of the day, from Guild Investment Management. The folks there explain why they think U.S. stocks are the best investment right now — and why they won’t get derailed by a trade mess.

“U.S. trade policy will produce results; over the summer there will be volatility, and eventually, progress,” say Monty Guild and his team of strategists in a summer strategy note.

“Why? Because a real trade war would be negative for everyone, and the world — which runs an $800 billion annual trade surplus with the U.S.— will be more than happy to maintain a $500 billion trade surplus,” Guild’s chief investment officer tells clients.

Trading partners will complain and make false accusations against the U.S. for imagined misdeeds, but will settle in the end and be grateful to maintain a still-positive trade position with the U.S., he predicts.

Guild points to the strong earnings growth and not-too-pricey valuations for U.S. stocks, backed up by a strong economy.

“The pessimist case for slow growth in the U.S. has been substantially wrong so far, and we believe it will continue to be wrong,” he says, providing this chart:

As for stocks in the rest of the world, Guild warns against Europe and its banking problems. Within emerging markets, the team likes Asian economies with growth based on manufacturing or tech expertise but not those that produce raw materials, owing to a pricey dollar.

And for Latin America, pick and choose a way through, says Guild, who thinks Argentina looks the best of a messy lot. See the chart of the day for more on emerging markets headaches, which are adding to the worry list for investors.

Read: ‘Something lurking out there’ will upset the stock market, says Blackstone’s Wien

The markets

The Dow DJIA, +0.16%  , S&P 500 SPX, +0.09% and Nasdaq Composite COMP, -0.02% are all moving lower this a.m. Asia ADOW, -1.08% was also having a number done on them by G-7 concerns, as were European stocks SXXP, -0.21% .

The dollar DXY, +0.14% is rising on those global jitters, while gold GCQ8, -0.02% and crude oil CLQ8, -0.67% are dropping.

Check out the daily Market Snapshot column for more.

The chart

Emerging markets woes have been popping up on the radar. One trouble spot, Argentina, reached a $50 billion bailout deal with the IMF last night.

Our chart of the day from the Wall Street Journal’s Daily Shot shows how pressure has been growing for currencies in the region:

Some traders blamed Thursday’s big drop for the yield on the 10-year Treasury note TMUBMUSD10Y, +0.13% on investors fleeing to safety after a meltdown for Brazil’s Bovespa BVSP, -2.14% stock market and real BRLUSD, +4.6912% .

Fears of higher U.S. and European interest rates are being blamed for those woes. Both the Fed and the ECB are holding policy meetings next week, meaning nerves may get rattled further in coming days.

The buzz

“Take down your tariffs & barriers or we will more than match you!” That was Trump, tweeting away last night as the fur flies ahead of the G-6-plus-1 summit. It won’t go down well that POTUS plans to ditch that meeting early, to prep for his get-together with North Korea’s leader.

Opinion: Heading into G-7, Trump’s Mr. Unpopular on the world stage

Apple AAPL, -1.32% is getting creamed and weighing on techs after a report that the company is readying for a 20% haircut on iPhone shipments for new devices launching later this year.

Meanwhile, China hawks in Congress aren’t finished fighting the White House’s bid to lift the bar on ZTE, with a late-night move to try to undo that deal.

Verizon VZ, -0.05% has named Hans Vestberg its new CEO. Meanwhile, watch U.S.-listed shares of BT BT, +1.57% BT.A, +0.99% after CEO Gavin Patterson was eased out at the U.K. telecoms giant.

Alibaba’s BABA, +0.86% Ant Financial has raised $14 billion from private investors. That values Jack Ma’s fintech carve-out at around $150 billion, making it one of the world’s most valuable privately held companies.

Shares of DocuSign DOCU, +6.47% and Stitch Fix FIX, +0.21% could log gains after upbeat results late Thursday.

There’s talk troubled Deutsche Bank DB, -1.82% DBK, -0.21% is exploring a merger with fellow German lender Commerzbank CBK, -1.80% . And Japan’s Takeda Pharmaceutical 4502, -0.83% say it has secured a $7.5 billion loan to help fund that Shire SHP, -0.27% SHP, -0.27% deal.

Facebook FB, +0.57% is back in the headlines after admitting some user posts accidentally went public in May. It says the glitch has been fixed.

In economic data, the only top-tier report is wholesale inventories this morning. But next week heats up with that Fed meeting, as well as updates on consumer prices and retail sales.

The quote

“The suicides of Anthony Bourdain and Kate Spade this week are a reminder: No matter how successful, wealthy or seemingly happy you are, we all battle our own demons.” — That was Chris Cillizza, a political commentator for CNN, mourning the loss of rock-star chef Bourdain, dead at 61.

Cillizza went on to urge people to “Reach out to one another. Destigmatize depression, addiction and anxiety. We are all in this together,” as tributes to the celebrity chef and author poured in over Twitter and elsewhere. According to the CDC, the suicide rate in the U.S. is up 30% since the 1990s.

Read: How to talk to someone who is struggling with depression

Random reads

A veteran Senate staffer is in trouble over allegedly leaking classified material.

The Capitols are celebrating in the capital after that Stanley Cup victory.

A firsthand look at the agony of immigrant kids being separated from their families in the U.S.

Tennessee hardware store back in the spotlight over its “No Gays Allowed” sign:

Hawaii volcano survivor filmed her pistol-packing neighbor.

A sad, desperate fight in the wild:

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