4 Blue-Chip Stocks Rallying on a U.S.-China Trade Deal

These four stocks are riding the bullish wave created from a cooling of trade tensions

By Anthony Mirhaydari, InvestorPlace Market Strategist

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U.S. equities were on a roll on Monday that looks set to continue Tuesday, with the Dow Jones Industrial Average crossing the 25,000 threshold for the first time since March.

Small-cap stocks in the Russell 2000 lead the way, enjoying a push to new record highs over the past week driven by the strength in the U.S dollar.

Large caps, however, don’t benefit from the dollar’s rise. And thus, they’ve lagged during the market’s runup over the past month. But things are changing now as investors price in rising odds of a trade agreement between China and the United States.

Over the weekend, Trump administration officials said the trade battle was “on hold” while Trump himself tweeted that, under a potential deal, China will buy as much food as American farmers can produce.

With the clouds seeming to part on trade, investors are piling into export-oriented stocks. Here are four making a move:

Blue-Chip Stocks to Buy for U.S.-China Trade Hopes: General Electric (GE)

General Electric (NYSE:GE) shares are breaking up and out of a long inverse head-and-shoulders base going back to February. Investors have been aggressively negative on the company amid disappointment with its restructuring plans under new management.

News of the U.S.-China trade dispute cooling, however, and the announcement of a deal to merge its transportation business with Wabtec (NYSE:WAB) is bringing in the buyers.

The company will next report results on July 20 before the bell. Analysts are looking for earnings of 18 cents per share on revenues of $29 billion. When the company last reported on April 20, earnings of 16 cents per share beat estimates by five cents on a 6.6% rise in revenues.

Blue-Chip Stocks to Buy for U.S.-China Trade Hopes: Boeing (BA)

Boeing Co (NYSE:BA) shares are breaking out of a three-month uptrend channel, challenging its late February highs, as investors rush into what is one of America’s most export-oriented companies. Analysts at Canaccord Genuity recently raised their price target on strong quarterly results.

The company will next report results on July 25 before the bell. Analysts are looking for earnings of $3.49 per share on revenues of $23.8 billion. When the company last reported on April 25, earnings of $3.64 beat estimates by $1.05 on a 6.5% rise in revenues.

Blue-Chip Stocks to Buy for U.S.-China Trade Hopes: Caterpillar (CAT)

Caterpillar (NYSE:CAT) shares are breaking up and out of the downtrend channel that’s been in place since January, rising above its March-May highs after rising support at its 200-day moving average earlier this month.

Earlier this month, Stifel analysts noted how April sales showed sustained momentum with double-digit increases across all geographies.

The company will next report results on July 30 before the bell. Analysts are looking for earnings of $2.72 on revenues of nearly $14 billion. When the company last reported on April 24, earnings of $2.82 beat estimates by 72 cents on a 30.9% rise in revenues.

Blue-Chip Stocks to Buy for U.S.-China Trade Hopes: Deere (DE)

Deere & Company (NYSE:DE) shares are moving powerfully out of their post-January downtrend channel, crossing up and over their 50-day and 200-day moving averages in recent weeks.

Last week, DE stock bulls found increased impetus to buy after management issued upbeat revenue guidance overshadowing an earnings miss.

Deere will next report results on Aug. 17 before the bell. Analysts are looking for earnings of $2.66 per share on revenues of $8.9 billion. When the company last reported on May 18, earnings of $3.14 missed estimates by 19 cents on a 34.3% rise in revenues.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2018/05/blue-chip-stocks-rallying-on-a-u-s-china-trade/.

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