Investors will be watching closely this weekend for news of a potential trade truce between the U.S. and China, after the leaders of both countries meet on the sidelines of the G-20 meeting in Japan Saturday.
Jeff deGraaf of Renaissance Macro Research delved into the industry-level reaction to positive trade news in Friday note to clients, finding that capital goods, materials, and automobiles and components stocks perform best on days when there is news of trade tensions easing. Looking at individual names within these industries provides some stark examples of over and underperformance on days when major news on the trade front breaks.
Microchip Technology Inc. MCHP, -0.50% shares fell 3.7%, versus a 0.5% decline in the S&P 500, while Micron Technology Inc. MU, +1.37% shares declined 2.8% and Nvidia Corp. NVDA, +0.61% stock fell 1.7%, according to FactSet.