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Goldman Sachs Group Inc strategists recommended favouring stocks concentrated in the services sector rather than goods-producing industries as a way of weathering the United States (US)-China trade war.
The ebb and flow of US-China trade negotiations during the past 12 months have had a more dramatic impact on the performance of goods-producing companies compared with services-providing firms, Goldman strategists led by David Kostin, wrote in a note. Last year’s trading suggests services-providing stocks will outperform goods-producing stocks as long as the trade dispute continues.
Investors got a fresh reminder this week of the market turmoil that the US-China tensions can cause, as risk assets swooned on threats by President Donald Trump to hike tariffs further on Chinese goods. The US and China are set to resume trade negotiations only hours before the new duties are scheduled to take effect.
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