- The escalating U.S.-China trade war has sent dividend-rich sectors like utilities higher, but investors don’t need to get all defensive just yet, according to strategists who say there are plenty of growth stocks with some insulation from China.
While the prospect of a prolonged trade war has shaken the market, investors are also trying to protect themselves from the risk that they could miss out on gains in the event that the United States and China reach a surprise agreement. Broadly speaking, investors have been raising their defenses. While the S&P has fallen roughly 4% since Trump announced his plan to raise tariffs on Chinese goods in early May, utilities - a low-growth sector with reliably high dividends - has risen more than 2%.
In online advertising, Morgan favors Twitter, Facebook and Snap Inc over Google parent Alphabet, which suspended business with China’s Huawei this week as a result of the trade battle. Steve Lipper, senior investment strategist at Royce & Associates favors U.S.-facing companies offering services such as recruiting and merger advice due to a strong U.S. labor market and solid merger activity.
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