Winners and Losers from the Trade Wars

< 1 minute read time

Trade tensions between the US and China now pose a real risk to markets, with leading indicators pointing to lower global growth. Livewire 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.


This material has been prepared by Alphinity Investment Management ABN 12 140 833 709 AFSL 356 895 (Alphinity). It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Any projections are based on assumptions which we believe are reasonable but are subject to change and should not be relied upon. Past performance is not a reliable indicator of future performance. Neither any particular rate of return nor capital invested are guaranteed.