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As the world waits in anticipation of a beneficial deal between the U.S. and China Jim Cramer highlights a few stocks that would benefit most from the deal.
The trade war between the U.S. and China has been ongoing for many months and has somehow wiggled its way into pretty much any conversation that involves the U.S. or China. Some other countries are sometimes dragged into the mix because some of the effects of the tensions have been felt by these countries even though they aren’t directly involved. However, there might be some respite soon and with it, the chance that a few stocks might be worth good money if things go right.
CNBC’s Jim Cramer who hosts the Mad Money show has revealed a list of stocks that investors and traders might need to watch out for in the wake of the newfound possibility that China and U.S. might shake hands. Yesterday, U.S. President Donald Trump put out a very optimistic tweet, revealing that trade negotiations were looking good and that the U.S. was “getting VERY close to a BIG DEAL with China” as the two countries are interested in it. The announcement could be interpreted as the U.S. reaching phase one of the deal.
The announcement of the deal could be announced later this day, however, it reported that the terms were already signed off by Trump.
Already, the possibility of a deal has been felt in Asian markets as the Shanghai Composite has climbed 1.2%, Hong Kong’s Hang Seng increased 2% Japan’s Nikkei 225 climbed 2.3%. In the U.S., both the S&P 500 and the Nasdaq Composite hit new highs of 3,168.57 and 8,717.32. Dow Jones has also demonstrated rather positive results. Cramer said the following stocks are to be monitored as long as people remember that “these are mostly short-term trades, not investments.”
Trump had earlier announced a new round of tariffs that would take effect from Dec 15, just a few days from today. If some semblance of a deal is reached, many tech players would be able to put out new offerings that would be a lot more affordable for consumers. Apple’s new iPhones could change their price and according to Cramer, Apple stock as well as stocks for Skyworks Solutions, Qualcomm and other tech giants could be easily boosted.
Cramer has a positive outlook on toymakers like Mattel and Hasbro, whose factories are in China and would be seriously hit if tariffs hold up on Sunday. News of a possible deal pushed both stocks up by 2.4% and 4.4% respectively, and Cramer thinks they will surge more if the deal is reached.
Cramer mentions a few giants including Visa, Goldman Sachs, Bank of America, Citigroup, JPMorgan Chase, American Express, and Mastercard. He believes that even though they have done well this year and will still stay positive even if the deal doesn’t work, the aforementioned companies have a lot to gain if the deal does work.
Worthy mentions here according to the host are Dollar Tree, Walmart, Target and Home Depot. Cramer believes that the fact that “there’s not a lot of upside built into them already, makes them attractive.”
According to Cramer, Union Pacific probably has more to do with China than others, meaning that if the deal works out, shares might shoot higher. FedEx is also a worthy mention as it has a good chance of jumping higher than the 3.7% it did on Thursday.
Here, Cramer says the stocks to watch out for are Cummins, Honeywell and Caterpillar.
Cramer, however, adds a disclaimer to is list about moving forward with buying stocks regardless of his predictions. He says:
“I still think the best way to bet on a trade deal is by presuming something’s going to go wrong, even after today’s encouraging developments.”
The host also added that it would be best to buy “stocks that have nothing to do with the trade war.”