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Goldman Sachs: What to Invest in If a Trade War Looks Likely

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Goldman Sachs: What to Invest in If a Trade War Looks Likely PART 1 OF 4

Goldman Sachs: Invest in These Stocks If a Trade War Looks Likely

Goldman Sachs on the recent trade war talk

On April 4, 2018, Goldman Sachs (GS) shared its views on investing in the current environment and thoughts on a potential global trade war. After major US indexes’ huge fall in February, we saw another round of correction in these indexes in March 2018. The S&P 500 (SPY), the NASDAQ (QQQ), and the Dow Jones Industrial Average Index (DIA) fell 2.7%, 2.9%, and 3.7%, respectively, in March 2018.

Goldman Sachs: Invest in These Stocks If a Trade War Looks Likely

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Donald Trump’s various announcements about the imposition of import tariffs on Chinese goods, steel, and aluminum affected investor sentiment in March 2018, with a global trade war looking likely. In retaliation, China announced that it will impose tariffs on 106 US products. The world’s two largest economies heading towards a trade war could be dangerous for the whole economy.

Goldman Sachs’s stock ideas

In such a scenario, the investment company advised clients that investing in stocks whose majority of revenue comes from the United States may offer a greater advantage than investing in those with mostly international revenue. According to CNBC, Goldman Sachs chief global equity strategist Peter Oppenheimer wrote that “below the surface of the market, trade conflict would benefit the performance of the most domestic-facing U.S. stocks relative to the most foreign-facing firms.”

The investment company highlighted CSX (CSX), CVS Health (CVS), Dollar General (DG), Verizon (VZ), Wells Fargo (WFC), Public Storage (PSA), and Intuit (INTU) as stocks whose revenue comes mostly from the United States. In the next part of this series, we’ll analyze Goldman Sachs’s views on Wells Fargo.

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