While no country can possibly win a trade war, there may be stocks that could prove resilient.
For most stocks trade war spells calamity. Based on foreign revenue levels, the biggest losers would be Semiconductors, Tech Equipment, Materials, Food & Beverage, Software and Capital Goods. That is a lot of sectors.
Hmm, what types of companies use domestic inputs, rely on domestic consumption and have low exposure to international trade? You're right, not many.There is one though – defense. In the face of war – trade war that is – both domestic and foreign sales would almost certainly remain steady.
It’s pretty hard to switch out your F-15 (McDonnell Douglas), your F-16 (General Dynamics) or even your F-35 (Lockheed Martin).
With the US responsible for more than 1/3 of global arms sales, a bevy of firms would be okay or maybe even benefit.
Weekly Update through July 27, 2018 The S&P 500 added 61bps, even as the Dow Jones gained 1.57%, the Russell 2000 lost -1.96%, the Nasdaq slid -1.05%.
As for US bonds, they dropped -17bps.
Globally, the MSCI World Index gained 81bps and the Barclays Global Aggregate Bond Index lost -20bps.
The Euro Stoxx 50 gained 1.98% in local-currency (Euro) and 1.54% in USD. Meanwhile, the Topix added 1.77% local-currency (Yen) and 2.54% in USD.
