US equity markets were down over 5.6% last week as President Trump followed through on announcing tariffs on China. Notably, MMM, CAT, AAPL, and DWDP were down 9.22%, 7.7%, 7.35% and 7.21% respectively as the market seemed to sell these Mega-Cap names as they may be more negatively impacted by a trade war.
Was this sell-off warranted across the market in general, and more specifically did these Mega-Cap stocks deserve this type of reaction? It seems to be consensus that China benefits more in its trade relationships with the majority of its G7 trading partners. However, trade representatives from the US and China have issued statements reporting that trade negotiations are occurring and that both countries are not interested in a trade war.
As a result, US equity indices rallied off the lows from Friday with Mega-Caps posting sizeable gains. However, this morning, the US announced an emergency law to curb Chinese takeovers to protect the US tech sector. Is it time to shrug off this announcement and be contrarian? Investors may be able to take advantages of opportunities in the equity market like last week as the fundamental case for strong equity returns this year remains intact.
Submitted March 27, 2018 at 10:58AM by QuantalyticsResearch https://ift.tt/2DZcbVG
