If one thing has been clear over the last couple of years, it is that US-China relations are getting worse. It started earlier in Trump’s term and has escalated in a tit-for-tat battle over the last couple years. Some refer to it as a great “uncoupling” while others say it is a new cold war. Whatever you call it, there are a handful of sectors that will do well as the situation unfolds. One such sector is automation and robotics companies. These companies are likely to do very well as US businesses are forced to re-shore manufacturing from China and seek out automation to make the return more economical.
FINSUM: A major decoupling will be a very ugly event. US companies do $500 bn of sales in China each year. The automation play makes sense. Check out the Robotics ETF (ROBO).
Markets were up big today on news out of China. The day started with Chinese stocks surging on news from the government—Chinese state media told its people that they should load up on stocks. This sent hopes for a recovery soaring around the global and markets rose strongly. Beyond the state’s endorsement, the Chinese economy does seem to be dong well. “In recent weeks the data has looked very positive from China. Its economy is back in motion, and that should lift global equities a bit”, summarized Principal Global Investors chief strategist, Seema Shah.
FINSUM: The state media announcement seems a bit hollow, but since real economic data in China appears to be improving, the overall direction looks positive.