stocks

These stocks could be the biggest winners if the US completes this phased trade deal with China – CNBC

October 13, 2019 by Zettan

US President Donald Trump shows a letter from Chinese President Xi Jinping as he announces and initial deal with China while meeting the special Envoy and Vice Premier of the People’s Republic of China Liu He Special Envoy and Vice Premier of the People’s Republic of China Liu He at the Oval Office of the White House in Washington, DC on October 11, 2019.

Nicholas Kamm | AFP | Getty Images

The U.S. and China agreed to the first phase of a “substantial” trade deal that delays tariff hikes scheduled to kick in next week. These stocks are set to win the most from the resolution, if it can be completed.

CNBC’s proprietary “China Trade Index” jumped nearly 2.5% on Friday on the partial deal announcement. The 25 companies in the index are among those with the biggest China revenue exposure and the most imports from China. They could have more room to gain as the two countries finalize the agreement.

Tariff-sensitive retailers

Another group of big winners is the retailers that are sensitive to tariffs. The group had been beaten down, as higher tariffs would stoke rising costs for the imported goods they sell. The removal of the tariff hike next week should give those retailers a boost.

UBS found retailers with a high percentage of merchandise exposed to Chinese duties based on company reports and conference calls.

Floor & Decor has about 45% products sold to China. Other retailers sensitive to tariffs include Advance Auto Parts and Restoration Hardware, whose stocks gained 1.6% and 2.8% respectively.

Big China exposure

Goldman Sachs screened Russell 1000 Index member companies for those with high revenue exposure to greater China, using 2018 company filings.

The list is concentrated in chipmakers Qorvo, Qualcomm, Micron Technology, Nvidia, Broadcom and Intel. Casino operators Wynn Resorts and Las Vegas Sands rely heavily on their revenue in China. The Yum spin-off Yum China generates all its sales from China, and its stock climbed 3.4% on Friday alone following the deal announcement.

‘Bigger tractors’

One particular stock, named by Trump himself, could win big in light of the deal.

As part of the deal, China would significantly step up purchases of U.S. agricultural products to about $40 billion to $50 billion, which is “three times what China has purchased at the highest point thus far,” Trump said on Friday.

The president said farmers will benefit from the “tremendous” amount of orders promised by China, adding they would need to buy bigger tractors from John Deere and other places.

“So I suggest farmers would have to go immediately buy more land and get bigger tractors. They will be available in John Deere and a lot of great distributors,” Trump said.

Deere & Co. shares added nearly 2% on Friday.

Stocks Advance With Yuan as China Eases Concerns: Markets Wrap – Yahoo Finance

August 8, 2019 by Zettan

(Bloomberg) — Equities rallied after China’s stronger-than-expected daily fixing of its currency eased fears about a worsening trade conflict.

The S&P 500 Index headed for its biggest advance in two months, led by technology companies, building on gains in Europe and Asia and at points erasing its loss for the week. Treasury yields edged higher and the dollar weakened. Oil climbed.

Thursday’s move by the People’s Bank of China was seen as an effort to stabilize its currency and went some way toward easing market concern that peaked Monday, when a weak reference rate spurred concern that the trade war was heating up. Despite evidence of some renewed risk appetite, stocks are still well off the record highs reached last month and traders remain jumpy about the potential for escalation in the conflict.

“For now, as far as volatility, the worst is over,” Rick Bensignor, the founder of Bensignor Group and a former strategist for Morgan Stanley, said in an interview at Bloomberg’s New York headquarters. “China’s smartly doing what they can. On their part, I think it’s a good tactical move.”

The dollar extended its decline after President Donald Trump said a strong greenback was hurting U.S. manufacturers and urged the Federal Reserve to cut interest rates.

The Stoxx Europe 600 rose the most in seven weeks. A gauge of Asia stocks increased as China’s Shanghai Composite rebounded from the lowest level since February. The Australian dollar gained from its lowest level in a decade. Bitcoin hovered below $12,000, a level it’s failed to close above for one month.

Oil snapped a three-day losing streak after Saudi Arabia contacted other producers to discuss options to stem a rout that’s been driven by the worsening China trade conflict.

Here are the main moves in markets (all sizes and scopes are on a closing basis):

Stocks

The S&P 500 Index increased 1.5% as of 2:02 p.m. New York time.The Stoxx Europe 600 Index jumped 1.7%, the biggest increase in more than seven weeks.The MSCI Asia Pacific Index climbed 0.6%, the largest increase in almost three weeks.The Shanghai Composite Index jumped 0.9% for the biggest increase in more than five weeks.

Currencies

The Bloomberg Dollar Spot Index dipped 0.2%.The onshore yuan rose 0.2% to 7.0451 per dollar.The euro was little changed at $1.1204.The Australian dollar jumped 0.8% to $0.6811 for the biggest increase in three weeks.The Japanese yen climbed 0.2% to 106.08 per dollar.

Bonds

The yield on 10-year Treasuries rose one basis point to 1.75%.Germany’s 10-year yield increased two basis points to -0.56%, the first advance in two weeks.Britain’s 10-year yield rose four basis points to 0.52%.

Commodities

Gold rose 0.1% to $1,502.26 an ounce.West Texas Intermediate crude rose 2.5% to $52.37.

–With assistance from David Ingles, Adam Haigh, Andreea Papuc, Laura Curtis and Andrew Dunn.

To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Brendan Walsh in Austin at bwalsh8@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, ;Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh, Todd White

bloomberg.com” data-reactid=”35″ type=”text”>For more articles like this, please visit us at bloomberg.com

Asian stocks rally as China’s factory bounce lifts confidence – Investing.com

April 1, 2019 by Zettan

© Reuters. FILE PHOTO: A videographer films an electronic board showing the Japan's Nikkei average and related indexes at the Tokyo Stock Exchange in Tokyo

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks powered higher on Monday as positive Chinese factory gauges and signs of progress in Sino-U.S. trade talks boosted sentiment, although another defeat for British Prime Minister Theresa May’s Brexit deal added to sterling’s woes.

Spreadbetters expected European stocks to open higher, with Britain’s gaining 0.4 percent, Germany’s adding 0.8 percent and France’s rising 0.9 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 1 percent and the rallied 2.4 percent.

Australian stocks climbed 0.6 percent, South Korea’s gained 1.3 percent and Japan’s advanced 1.4 percent.

The markets took heart after China’s official purchasing managers’ index (PMI) released on Sunday showed factory activity unexpectedly grew for the first time in four months in March.

A private business survey, the Caixin/Markit PMI, released on Monday also showed the manufacturing sector in the world’s second biggest economy returning to growth.

If sustained, the improvement in business conditions could indicate that manufacturing is on a path to recovery, easing fears that China could slip into a sharper economic downturn.

“Our view is the impact of policy easing is gradually kicking in, pushing up sequential growth indicators such as PMI first,” wrote China economists at Bank of America Merrill Lynch (NYSE:).

“In particular, the larger-than-expected tax and fee cuts and improving financial conditions have likely helped boost business sentiment in the manufacturing space.”

Stocks in Asia also took their cues from Wall Street, with the posting its best quarterly gain in a decade on Friday amid trade optimism. ()

The United States and China said they made progress in trade talks that concluded on Friday in Beijing, with Washington saying the negotiations were “candid and constructive” as the world’s two largest economies try to resolve their drawn out trade war.

“The ongoing U.S.-China trade conflict has provided a steady stream of conflicting signals for the markets. But as a whole the negotiations appear to be headed towards a conclusion,” said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management.

“Hopes that the United States and China would reach an agreement on trade as early as this month are enabling stocks to begin the quarter on a positive tone.”

In the currency market, the against a basket of six major currencies stood at 97.147 after going as high as 97.341 on Friday, its strongest since March 11.

The greenback had benefited from the flagging pound, which was on track to post its fourth day of losses in the wake of the ongoing Brexit saga.

Sterling took its latest knock after British lawmakers rejected Prime Minister May’s Brexit deal for a third time on Friday, sounding its probable death knell and leaving the country’s withdrawal from the European Union deeper in turmoil.

The pound crawled up 0.15 percent to $1.3055 having posted three sessions of losses.

The Australian dollar advanced 0.35 percent to $0.7122. The is sensitive to shifts in the economic outlook for China, the country’s main trading partner.

The euro rose 0.2 percent to $1.1239 while the dollar gained 0.2 percent to 111.035 yen.

Safe-haven government bonds retreated as risk aversion in the broader markets eased.

The benchmark edged up to a six-day high of 2.444 percent, pulling away from a 15-month low of 2.340 percent brushed on March 25.

The Treasury 10-year yield had sunk as the Federal Reserve halted its drive to hike rates and as risk aversion, driven by concerns about a global economic slowdown, gripped financial markets towards the end of March.

The slide had pushed the 10-year yield below the three-month rate for the first time since 2007 late last month.

This phenomenon – when the spread between short- and long- dated yields turns negative – is known as a curve inversion and has preceded every U.S. recession over the past 50 years.

The 3-month/10-year yield spread has since pulled back from negative territory and stood around 3 basis points.

prices added to Friday’s gains, with U.S. West Texas Intermediate (WTI) futures gaining 0.6 percent to $60.52 per barrel.

Oil prices posted their biggest quarterly rise in a decade during January-March, as U.S. sanctions against Iran and Venezuela as well as OPEC-led supply cuts overshadowed concerns over a slowing global economy. [O/R]