Goldman thinks the trade right now is on China's economy and gives 2 U.S. stocks to play it

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'We recommend investors own mining stocks, which are levered to China growth through rising metals prices,' Goldman said.

The rebound in China's economy creates an opportunity for U.S. equity investors who can capture that strength by picking mining stocks, according to Goldman Sachs. "China economic data has improved," David Kostin, Goldman's head of U.S. equity strategy, said in a note. "We recommend investors own mining stocks, which are levered to China growth through rising metals prices.

The Wall Street firm's commodity strategists expect the S & P GSCI Industrial Metals Index, which tracks metals prices, to rise by 32% over the next year. Metals and mining stocks typically mirror the performance of the index, Goldman said. FCX AA YTD mountain Freeport McMoRan and Alcoa Goldman named Freeport-McMoRan and Alcoa as two favorites. The firm said mining stocks in general are relatively cheap right now, trading at a 20% discount to the S & P 500.

 

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