The Winners (and Losers) of the Trump-China Trade Truce
On Saturday, the U.S. and China put out a joint statement, announcing that "China will significantly increase purchases of U.S. goods & services" and that "both sides agreed to encourage two-way investment and to strive to create a fair, level playing field for competition". As Investor's Business Daily analysis shows, for some companies this had an immediate positive effect on their share price. For those in the steel industry however, the reception of the news wasn't quite so favorable.
Reacting on Monday, the markets rallied, with U.S. companies such as Boeing, Caterpillar and John Deere laying on 3.6 percent, 2.1 percent and 2.0 percent in value, respectively. All three are significantly reliant on trade with China. Boeing, for example, could benefit from $1.1 trillion worth of jet purchases over the next twenty years, according to Investor's Business Daily. In the world's largest construction equipment market, Caterpillar has also invested heavily in China.
The other side of the story is steel. U.S. Steel Corporation was down by 3.8 percent on the news, while AK Steel also saw a drop of 5.1 percent. This certainly isn't the end of the story though, with a lot of details still to be ironed out - and stuck to by both sides.
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