US-China Trade Agreeent May Affect The Following Stocks
The US and China have agreed on what has been defined as a "very substantial first stage of a trade agreement."
After a long wait, and countless tweets, US president Donald Trump announced on Friday that China and the US have reached a partial trade agreement . Trump called the agreement a "very substantial first phase of a trade agreement."
Trump says the agreement is only expected to be signed in a few weeks and the deal includes understandings on financial services and major agricultural acquisitions. Finance Minister Stephen Mnuchin argued at a news conference that following the consents, tariffs scheduled to take effect this week would not actually be executed.
CNBC's China trade index, which includes the top 25 companies with the highest exposure to China in terms of their revenue and volume of imports from China, rose about 2.5% on Friday in response to the anouncement.
The following list of stocks are included in the index and are expected to go up as the overall deal would be completed.
Retailers
Another group of companies that are expected to make a significant impact from Customs changes are retail companies that make up much of the merchandise they sell based on imports from China. Below is the list of the most exposed companies, which was prepared by UBS.
Flood and Decore (FND) - exposure rate - 45%
Restoration Hardware (RH) - exposure rate - 40%
Advance Auto Parts (AAP) - exposure rate - 35%
Auto Zone (AZO) - 35%
O'Reilly Automotive (ORLY.MX) - 35%
Bed Bath and Beyond (BBBY) - 17%
Dicks Sportings Goods (DKS) - 15%
National Vision - Five Below (EYE) - 15%
Five Below (FIVE) - 15%
William Sonoma (WSM) - 15%
The companies whose earnings are most exposed to China
In the Goldman Sachs investment bank have prepared a similar list based on the shares of the Russell 1000 Index, whose earnings are most exposed to China, based on 2018 results.
Yum China (YUMC) - exposure rate - 100%
Wynn Resorts (WYNN) - exposure rate - 75%
Qorvo - (QRVO) - exposure rate - 74%
Monolithic Power Systems (MPWR)- exposure rate - 70%
Qualcomm (QCOM) - exposure rate - 67%
Micron Technologies (MU) - exposure rate - 66%
Las Vegas Sands (SVS) - exposure rate - 62%
Nvidia (NVDA) - exposure rate - 53%
Broadcom (AVGO) - exposure rate - 49%
Applied Material (AMAT) - exposure rate - 45%
Texas Instruments (TXN) - exposure rate - 44%
IPG Photonics (IPGP) - exposure rate - 43%
Intel (INTC) - exposure rate - 42%
Teradyne (TER) - exposure rate - 41%
