Wall Street Weekahead: Trade protection doesn't have to exclude growth stocks

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The escalating U.S.-China trade war has sent dividend-rich sectors like utilitie...

- 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.

Because of the difficulty handicapping the chance of a U.S.-China deal, John Praveen Portfolio Manager at QMA in Newark, New Jersey, said he would not “completely sell out” of stocks. But he said: “if I was 5% overweight stocks, I might reduce it to 3 pct and see if I could reduce exposure to semiconductors and technology.”

But growth-hungry investors are seeking more nimble companies with little exposure to overseas sales or Chinese imports even in the beaten down technology sector, where semiconductor stocks have lead the recent declines. He also likes software providers such as Salesforce.com, which derives 70% of its revenue from the Americas and only 10% from Asia-Pacific. However, Salesforce.com has fallen more than 5% since the Trump tweets.

But while U.S.-facing recruitment firms such as Kforce and ASGN Inc may not be hurt directly by the trade war, Robert W. Baird analyst Mark Marcon notes that they would suffer if tariffs caused the economy to weaken.

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