Caterpillar Inc (CAT)

[ITMS]

These Stocks Will Sink If There Is No Trade Deal

Over the weekend we heard there was news that China and the United States were far apart when it comes to a trade deal. It was originally reported that the Chinese would not send delegates to the U.S. this week for more negotiations. This news sent the Shanghai market sharply lower as it declined by nearly 6.0 percent overnight. The U.S. markets also started the session sharply lower at the open but have rallied decently off the lows so far today.

Many different sectors and stocks will come under pressure if there is no trade deal soon. First, the semiconductor stocks are highly tied to a Chinese trade deal. This morning, the VanEck Vectors Semiconductor ETF (NYSEArca:SMH) is trading lower by 2.0 percent on the news. Many individual semiconductor stocks such as Micron Technology Inc (NASDAQ:MU), NVIDIA Corp (NASDAQ:NVDA), Skyworks Solutions Inc (NASDAQ:SWKS), Broadcom Inc (NASDAQ:AVGO) and many others are also trading sharply lower today.

Caterpillar Inc (NYSE:CAT) is also another stock that could be punished if there is no trade deal. Remember, they are the leading manufacturer in construction and mining equipment. Apple Inc (NASDAQ:AAPL) is a U.S. tech giant that gets about 18.0 percent of its revenue from China, so this stock could be adversely affected on a failed trade deal. The casino stocks could also be vulnerable on a failed trade deal. Stocks such as Wynn Resorts Ltd (NASDAQ:WYNN, Las Vegas Sands Corp (NYSE:LVS) and MGM Resorts International (NYSE:MGM) are heavily tied to China's Macau market.

Get ready, this trade story between the U.S. and China could just be heating up. While both countries want and need a trade deal the negotiations seem to have reached a road block. Either way, this news should create solid trading opportunities for traders and investors along the way.



Nick Santiago
InTheMoneyStocks