Winners and losers from the trade wars

Livewire Exclusive

Livewire Markets

Trade tensions between the US and China now pose a real risk to markets, with leading indicators pointing to lower global growth. We sat down with Stephane Andre, Principal at Alphinity Investment Management to get his view and to see who the winners and the losers may be in this scenario. 

 

Key points

  • Trade tensions between US and China have become a real risk, affecting sentiment at a time that leading indicators such as Purchasing Manager Indices (PMI’s) are already falling. Sentiment is driving a move from cyclical to defensive investments.
  • The market may still be ‘pricing in’ the tariffs, with the implications of the second ‘tranche’ of $200 billion of proposed tariffs being factored in now. Economists estimate that each $100 billion of tariffs could take 0.1% off global growth (currently 3.9%).
  • Losers could include Qantas (if trade affects business); base metals and copper companies; miners more generally (although these could potentially benefit if China responds with stimulus).
  •  Winners could include: Stocks with US$ revenues, as the A$ would fall (e.g.: Resmed, CSL, Aristocrat); Bluescope as it has US operations where steel prices are higher; and yield sensitive names and staples. 

Further insights  

Alphinity’s aim is to deliver consistent outperformance for investors by investing in quality, undervalued companies, with underestimated forward earnings expectations. Find out more

 

 


1 topic

8 stocks mentioned

Livewire Exclusive
Livewire Markets

Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment