October 16, 2019 Finance and Tech Publication

These stocks are the China trade talks ‘tells’ — They’ll move on deal progress or a breakdown

President Donald Trump meets with China’s President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, June 29, 2019.

Kevin Lemarque | Reuters

A slimmed-down trade deal, stalled talks and a “fluid” situation are just some of the conflicting reports that have surfaced this week as the U.S.-China trade talks officially kicked off on Thursday. For investors reading the tea leaves of every trade headline, things can get confusing.

But there are certain stocks investors should focus on over the next two days as the true “tell” on whether talks are making any progress.

First there’s the CNBC’s proprietary China Trade Index to track companies with biggest China revenue exposure and most imports from China.

The index includes the typical trade bellwethers Apple, Nike and Caterpillar and also contains many retail names such as Best Buy, Kohl’s, Honeywell.

The gauge is having a wild week as companies move in tandem along with trade headlines. Most recently, it jumped 2% after President Donald Trump said he’s meeting with Chinese Vice Premier Liu He on Friday, renewing hopes for a trade resolution. Member stocks including Kohl’s, Emerson Electric and Caterpillar popped 2% on Thursday following Trump’s comment.

Earlier in the week on Tuesday, the index plunged as tensions intensified after the U.S. blacklisted 28 Chinese entities over alleged human rights violations against Muslim minorities in Xinjiang, while putting visa restrictions on Chinese officials involved. China responded “stay tuned” for retaliation against the blacklist.

All eyes are on Thursday’s high-stakes negotiations as the U.S. and China go head to head on trade. Stocks already had a wild ride Wednesday night after a slew of contrasting reports sparked volatile overnight trading.

Stocks with highest China revenue

Goldman Sachs screened Russell-1000 Index member companies for those with high revenue exposure to Greater China, using 2018 company filings. These stocks will be very sensitive to any signs the trade talks this week are going well or poorly.

The list is concentrated in chipmakers including Qorvo, Qualcomm, Micron Technology, Nvidia, Broadcom and Intel. Semiconductors are already under pressure after the Trump administration blacklisted Chinese telecom giant Huawei, a big customer of U.S.-made chips.

The YUM! spin-off Yum China has 100% of its sales from China, and its stock has tanked 8.4% in the last three months. Casinos Wynn Resorts and Las Vegas Sands are heavily relying on their revenue in China, which have seen their stocks falling 26% and 17.7% respectively.

Related Posts

Robert Shiller says economic stories like fears of a recession can go viral and be self-fulfilling

October 16, 2019

October 16, 2019

Nobel Prize-winning economist Robert Shiller came to the New York Stock Exchange to discuss his new book, “Narrative Economics.” It’s...

Grayscale Posts Record Quarter Despite Slump in Bitcoin Prices

October 15, 2019

October 15, 2019

Grayscale Investments, one of the world’s leading digital asset management companies, has reported a new milestone. According to a quarterly...

Goldman Sachs says it marked down WeWork stake by $80 million

October 15, 2019

October 15, 2019

Adam Neumann, CEO of WeWork. Eduardo Munoz | Reuters Goldman Sachs was stung by its bet on WeWork — but...

Goldman Sachs CEO says Apple Card is the most successful credit card launch ever

October 15, 2019

October 15, 2019

Apple CEO Tim Cook introduces Apple Card during a launch event at Apple headquarters on Monday, March 25, 2019, in...

DE Shaw gives searing indictment of waste at Emerson Electric, including fleet of 8 airplanes

October 15, 2019

October 15, 2019

David Farr, CEO, Emerson Electric Scott Mlyn | CNBC D.E. Shaw, the $50 billion hedge fund that in recent years...

Here are the biggest analyst calls of the day: Amazon, Square, Lowe’s & more

October 15, 2019

October 15, 2019

Founder, Chairman, CEO and President of Amazon Jeff Bezos gives a thumbs up as he speaks during an event about...

Low mortgage rates are giving Lowe’s a boost, Piper Jaffray says in upgrading the stock

October 15, 2019

October 15, 2019

An employee organizes buckets for sale inside a Lowe’s Cos. store in Burbank, California. Patrick T. Fallon | Bloomberg |...

Longtime Berkshire Hathaway shareholder sells stake, accusing Warren Buffett of ‘thumb-sucking’

October 14, 2019

October 14, 2019

Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at...

Goldman Sachs is expected to report third quarter hits from sinking WeWork, Uber stakes

October 14, 2019

October 14, 2019

David Solomon, chief executive officer of Goldman Sachs Group Tiffany Hagler-Geard | Bloomberg | Getty Images Goldman Sachs may suffer...

Morgan Stanley slashes Netflix price target by $50, but remains bullish on stock

October 14, 2019

October 14, 2019

A remote control is seen being held in front of a television running the Netflix application Jaap Arriens | NurPhoto...

Here are the winners of the Nobel prize in economics and why they won it

October 14, 2019

October 14, 2019

The 2019 Nobel prize in economics was awarded to economists Abhijit Banerjee, Esther Duflo and Michael Kremer for their novel...

Here are the biggest analyst calls of the day: Western Digital, Nike, Tapestry & more

October 14, 2019

October 14, 2019

Charts flash bullish sign for homebuilders, technical analyst… The ITB, the homebuilder’s ETF, has its highest level since January 2018....

Bank of America upgrades Nike after missing the rally in the stock

October 14, 2019

October 14, 2019

Workers install a Nike logo lamp outside the Wukesong Arena in Beijing, August 28, 2019. Tingshu Wang | Reuters Nike...

Bank of America upgrades Nike after missing the stock’s rally

October 14, 2019

October 14, 2019

Workers install a Nike logo lamp outside the Wukesong Arena in Beijing, August 28, 2019. Tingshu Wang | Reuters Nike...

Investor Ken Fisher loses $600 million contract after making sexist comments at summit

October 12, 2019

October 12, 2019

The state of Michigan has pulled $600 million of its pension fund from wealth management company Fisher Investments after the...