A trade war is in full swing. While the US finally closed an updated trade deal with Mexico and Canada this weekend, the big battle with China is still revving up. Both sides have raised tariffs considerably in recent weeks and have canceled various negotiations and meetings. With that in mind, Goldman has put out a list of stocks they say will perform well in the ongoing trade battle. Overall, Goldman says shares with high and stable margins are in the best position to pass along cost pressures, which means they are the best bet for investors. “Companies with high pricing power are well-positioned to pass through input cost pressure to consumers, preserving high margins … The market typically rewards companies with high margins when the outlook for corporate profitability worsens”, says the bank. Some of the stocks listed include Autozone, Adobe, Coca-Cola, VeriSign, Ralph Lauren, and Expedia, among a total list of 33 companies.
FINSUM: We like the approach and diversity of this list of shares. We do think a commanding market position will be key to maintaining margins, so agree with Goldman’s view here.