GOLDMAN SACHS: These 14 China-dependent stocks are poised to smash the market if the trade war gets resolved

Christopher Competiello

Jun 28, 2019, 18:24 IST

GOLDMAN SACHS: These 14 China-dependent stocks are poised to smash the market if the trade war gets resolved

Kyodo News/gettyimages

Goldman Sachs chief US equity strategist David Kostin reveals the perfect stock selection for investors betting on an amicable Trump-Xi meeting at the G20 summit.
The firm identifies 14 stocks in particular that will be the "biggest beneficiaries" of a resolution. And even if a resolution isn't reached until later in the year, Goldman says they're still a good buy.
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There's no doubt that investors are fretting over the impending Trump-Xi meeting at the G20 summit.

Once amicable and symbiotic, the relationship between the world's two-largest economies has slowly deteriorated, sending swaths of investor capital to the sidelines.

As the day of reckoning nears, those hoping for a resolution have quickly peeled back expectations. And, as it stands right now, investors are betting heavily on a kick the can down the road-esque outcome at best.

But not all hope on Wall Street is lost.

Goldman Sachs thinks a surprise to the upside will send stocks soaring - and they've earmarked the stocks and sectors that they think will perform best.

The picks all share one common thread: deep Chinese sales exposure.

"If the outcome of the G20 meeting eases trade tensions and the market-implied probability of a trade deal rises to 100%, the S&P 500 P/E multiple could expand by 1x, to 18x," David Kostin, Goldman's chief US equity strategist, said in a client note. "Info Tech, particularly Semiconductors, and stocks with high China sales exposure will likely be the biggest beneficiaries."

And even if a deal isn't reached at G20 over the weekend - an outcome Goldman assigns just a 15% probability - the stocks identified by Goldman are still worth keeping in mind in the event of a resolution further down the line.

With all of that established, here are the 14 stocks that can benefit most from a G20 deal, ranked in increasing order of the percentage of sales that are derived from China.

Get the latest Goldman Sachs stock price here.