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If Trump cannot secure a trade violence, make sure these stocks are hammered



Investors will closely watch the weekend for news of a potential trade weapon between the United States and China after the leaders of both countries meet on the sidelines of the G20 meeting in Japan on Saturday.

While the broad stock market – measured by the S&P 500 index

SPX, + 0.35%

or Dow Jones Industrial Average

DJIA, + 0.25%

̵

1; will surely move the news of a deal or lack thereof, investors would be wise to focus on industries and companies that have been most sensitive to trading news in recent years .

Jeff deGraaf of Renaissance Macro Research entered the industry-level response to positive trading news on Friday's note to clients, and found that capital goods, materials, and cars and components are doing best on days when there is news of trading tension relief.

Renaissance Macro Research

He also discovered that on days when there are negative trading news, semiconductors, consumables and cars and components perform worst.

Renaissance Macro Research

Looking at some names in these industries gives some strong examples of over and underperforming on days when major news on the trading front breaks.

For example, on May 6, the first trading day after President Trump's announcement that he would raise tariffs of $ 200 billion of imports after a breakdown in trade negotiations, the semiconductor name suffered greatly.

Microchip Technology Inc .

MCHP, + 1.35%

shares fell 3.7%, against a 0.5% decrease in S&P 500, while Micron Technology Inc .

MU, + 1.48%

shares declined 2.8% and Nvidia Corp .

NVDA, + 0.61%

shares fell 1.7%, according to FactSet.

On the first trading day after the last G20 meeting in December last year, the capital stock was allegedly news that presidents Trump and Xi had agreed to an agreement to halt the escalation of tariffs expected to rise in January.

3. December 2018, Deere & Co .

DE, + 1.10%

shares went 4.7%, General Electric Co .

GE, + 0.58%

share rose 4.1% and Stanley Black and Decker Inc .

SWK, + 0.30%

shares jumped 4% compared to a 1% increase for S & P 500.


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