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Now that trade deals are getting done, this out-of-favor stock-market strategy may shine

About a month after 'Liberation Day' and the huge tariffs announced that day are now a distant memory, as tariffs between the U.S. and China were each largely rolled back. More on that later. UBS strategists led by Sean Simonds have a timely note about how the questions will now focus less on policy uncertainty and more on outcome uncertainty. 'We are possibly past the peak of uncertainty as more granular detail on tariffs and other policies come into focus,' they say. 'What comes after this, however, is the policy OUTCOME uncertainty,' with the capitalization the choice of the authors. 'It just doesn't seem right': My sister picks up the check for our parents, but later asks me to repay her I'm 65 and a widow with 5 children. Should I split my $1.1 million nest egg between them while I'm still alive? 'I'm so confused': Is the U.S.-China trade deal for real? I'm 55 and have $650K in my 401(k). Can I finally rest easy? My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? My husband and I spend more money on our daughter and her family than on my single son. Do we compensate him? The UBS team's assumptions were based on 10% universal tariffs and 60% on China — the latter of which is now double the actual tariff level, but given sector tariffs as well, probably a reasonable starting point as to guessing the economic implications. Their assumption is the U.S. economy will slow from a 2% year-over-year rate in the first quarter to 0.7% by the fourth quarter. 'Elevated, but uncertain volatility/risks suggest a value orientation (avoiding high valuations). However, the potential for continued economic momentum into 2026 suggests keeping exposure to some cyclical growth companies,' the UBS team say. So what's the right strategy? UBS suggests growth at a reasonable price. Granted, that's not a strategy that has worked recently: the Invesco S&P 500 GARP ETF GARP, for instance, has underperformed the broader S&P 500 SPX this year, over the last 52 weeks and the last three years. 'Growth at a reasonable price (GARP) investing became a lot more difficult in the last decade as valuations expanded and a narrower set of companies were able to generate consistent growth. After the recent derating and with economic transitions underway, we think GARP may find renewed interest,' they say. They produced this list of 29 stocks they think meet the criteria — on average, the companies trade at 30 times estimated 2025 earnings with a 19% expected return from UBS analysts. Tapping a valuation database called HOLT it inherited from Credit Suisse, the strategists said all of the stocks are in the top half of the market on operational quality, in the top quarter on growth and neither a value trap or too expensive, as well as being over $10 billion in market cap. The list ranges from well-known companies like Broadcom AVGO to On Holdings ONON, the Swiss sneaker maker backed by tennis star Roger Federer. Ticker Name Industry 2025e PE 2026e PE Price chg (since 31-Dec) AVGO Broadcom Inc Semiconductors & Semiconductor 32 27 -10% LLY Eli Lilly & Co Pharmaceuticals, Biotechnology 53 43 -2% CRM Salesforce Inc Software & Services 28 25 -16% NOW Servicenow Inc Software & Services 59 49 -8% INTU Intuit Inc Software & Services 34 30 5% BKNG Booking Holdings Inc Consumer Services 24 21 4% PGR Progressive Corp Insurance 18 18 21% ETN Eaton Corp Plc Capital Goods 26 23 -7% ANET Arista Networks Inc Technology Hardware & Equipment 34 29 -21% APH Amphenol Corp-Cl A Technology Hardware & Equipment 30 28 16% KLAC Kla Corp Semiconductors & Semiconductor 22 21 12% CTAS Cintas Corp Commercial & Professional Serv 49 44 18% EQIX Equinix Inc Equity Real Estate Investment 61 54 -8% CMG Chipotle Mexican Grill Inc Consumer Services 42 35 -15% ADSK Autodesk Inc Software & Services 35 30 -2% HLT Hilton Worldwide Holdings In Consumer Services 31 27 -2% IDXX Idexx Laboratories Inc Health Care Equipment & Servic 40 36 19% HEI Heico Corp Capital Goods 60 54 13% TW Tradeweb Markets Inc-Class A Financial Services 43 38 11% ROL Rollins Inc Commercial & Professional Serv 52 46 5% TYL Tyler Technologies Inc Software & Services 50 45 -2% VLTO Veralto Corp Commercial & Professional Serv 26 24 -4% EME Emcor Group Inc Capital Goods 19 17 -3% RYAN Ryan Specialty Holdings Inc Insurance 31 26 9% ONON On Holding Ag-Class A Consumer Durables & Apparel 41 32 -9% EQH Equitable Holdings Inc Financial Services 8 6 18% BSY Bentley Systems Inc-Class B Software & Services 40 35 10% MANH Manhattan Associates Inc Software & Services 41 37 -31% KNSL Kinsale Capital Group Inc Insurance 26 22 -2% Data: UBS/FactSet/Bloomberg A big day in financial markets is shaping up: Futures on the Dow YM00 are up more than 1,000 points as S&P 500 ES00 and Nasdaq 100 NQ00 contracts rally. Gold GC00 is tumbling. So are bonds: the yield on the 10-year Treasury BX:TMUBMUSD10Yrose 8 basis points. Need to Know starts early and is updated until the opening bell, but to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. Key asset performance Last 5d 1m YTD 1y S&P 500 5659.91 -0.47% 5.53% -3.77% 8.37% Nasdaq Composite 17,928.92 -0.27% 7.20% -7.16% 9.72% 10-year Treasury 4.445 9.60 6.70 -13.10 -4.80 Gold 3219.3 -3.71% -0.23% 21.98% 37.44% Oil 62.89 9.89% 2.16% -12.49% -20.59% Data: MarketWatch. Treasury yields change expressed in basis points The U.S. and China, after trade talks in Geneva, agreed to cut tariffs on each other by 115 percentage points, for at least 90 days. Treasury Secretary Scott Bessent further added that talks on fentanyl, where tariffs on China remain in place, were positive. President Donald Trump over the weekend said he'll sign an executive order putting 'most favored nation' status on drug prices, a move that's only expected to impact government-run health programs. Eli Lilly LLY said its Zepbound drug led to superior weight loss than Novo Nordisk's NVO Wegovy in a Phase 3b trial. Apple AAPL is considering raises prices on the iPhone but won't blame tariffs if it does, according to a Wall Street Journal report. European defense stocks fell on the possibility of Russia-Ukraine peace talks, in Turkey on Thursday. India and Pakistan signed a U.S.-brokered ceasefire deal. Trump administration in talks to accept new Air Force One as gift from Qatar. Elizabeth Holmes's partner has a new blood-testing start-up. Chinese EV battery giant CATL aims to raise $4 billion in Hong Kong IPO. Morgan Stanley plotted this chart of 'inflation' mentions on U.S. corporate conference calls, taken from AlphaSense data, versus the year-over-year inflation rate. The next consumer price index report is due for release on Tuesday. Here were the most active stock-market tickers as of 6 a.m. Eastern. Ticker Security name TSLA Tesla NVDA Nvidia GME GameStop AAPL Apple PLTR Palantir Technologies AMZN AMD Advanced Micro Devices TSM Taiwan Semiconductor Manufacturing META Meta Platforms MSTR MicroStrategy In Alaska, Mother's Day was celebrated with free visits to see these ice-age survivors. One mother and son celebrated the weekend by each getting master's degrees from Texas Christian University. A Congressman revealed a secret passage inside the U.S. Capitol that dates back to the 1700s. As the Dow and S&P claw back their 2025 losses, they're setting up for an extremely rare comeback victory The bulls are back in town. Goldman and this Wall Street optimist are lifting their S&P 500 targets on tariff relief. 'I am scared to death that I'll run out of money': My wife and I are in our 50s and have $4.4 million. Can we retire early? 'Be vigilant with your finances': My IRA had an unknown beneficiary designation. How could this happen? My eldest son refused to share his father's $500K inheritance with his siblings. Should I cut him off?