Categories U.S. Markets News

The winners of US-China trade war resolution

Markets, both in the US and China, warmly welcomed the temporary hold on new tariffs after President Donald Trump and Chinese counterpart Xi Jinping found a common ground at the G20 Summit held in Buenos Aires last weekend.

Numerous stocks have been at the receiving end of the escalating trade tension between both the countries. The temporary truce comes as a breather for these stocks, with many of them closing much higher on Monday. But a permanent resolution would give rise to numerous winners. Let’s see who they are.

FAANG stocks

The elite club has taken a beating recently, though most of the blame should land on Apple (AAPL). On Monday, all these stocks jumped on reports of the ceasefire. Apple closed up 3.4%; Amazon (AMZN) up 4.8%; Netflix (NFLX) up 1.4%; Alphabet (GOOGL) up 0.6%; and Facebook (FB) up 0.3%.       

Given that these companies have a wide geographic presence, removal of trade barriers would greatly benefit these companies.

Semiconductors, automobile makers

Thanks to the increasing demand for mobile phones and electronic devices, the semiconductor industry is today a highly competitive sector. Chips are often shipped between nations by device manufacturers to ensure superior quality and cheaper rates, making the industry highly prone to the tariff trap.

Major chipmakers including Qualcomm (QCOM), Nvidia (NVDA), Micron (MU), Broadcom (AVGO) and Intel (INC) have high Chinese exposure. The sector would be one of the largest beneficiaries of the trade war resolution.

Trump effect and trade war: Markets slip on unclear China-US deal negotiations

The same applies to automakers. If you remember, Harley-Davidson (HOG) had locked horns with President Trump after the motorcycle maker said it would shift some of the production outside the country to avoid tariffs. This is apart from car companies that sell in China.

US-listed Chinese stocks

Despite the strong operational performance, Chinese companies listed in US stock markets have been on a downward trajectory over the last year due to trade war concerns. In the past 52 weeks, Alibaba (BABA) is down 12%; Baidu (BIDU) is down 23%; Weibo (WB) is down 45%, and (JD) is down 43%.

If the cloud clears over the trade war, investors would start once again meriting these stocks on their performance.

Trump effect and trade war: Retaliatory tariffs by the world on United States in 2018

ZTE Corp

Chinese multinational telecommunications firm ZTE Corp would be one of the largest individual beneficiaries of a trade war resolution. The company has been caught between a rock and a hard place after US banned American suppliers from selling to ZTE for allegedly violating trade sections.


Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference, and much more!


Most Popular

Stock Watch: Is Darden Restaurants a good buy after earnings?

After a prolonged slowdown, the restaurant industry is returning to normal patterns but macroeconomic uncertainties and high inflation are currently playing spoilsport for it. While the pandemic-related slump forced many

Lennar (LEN) believes that despite near-term challenges, the long-term prospects for housing remain strong

Shares of Lennar Corporation (NYSE: LEN) were down 3% on Monday. The stock has dropped 36% year-to-date and 25% over the past 12 months. The homebuilder delivered mixed results for

KB Home (KBH): What did and did not work for the homebuilder in the third quarter

Shares of KB Home (NYSE: KBH) were up slightly on Friday. The stock has dropped 40% year-to-date and 35% over the past 12 months. The company delivered mixed results for


Add Comment
Viewing Highlight