Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Indexes  >  USA  >  S&P 500    SP500

Indicative prices Citigroup

S&P 500

(SP500)
Pre-market
%
PTS
Delayed Quote. Delayed USA - 10/22 05:03:24 pm
2995.99 PTS   -0.36%
01:16aNEWS HIGHLIGHTS : Top Global Markets News of the Day
DJ
01:07aAsia shares slip on Brexit snag, Texas Instruments' revenue woes
RE
01:06aAsia shares slip on Brexit snag, Texas Instruments' revenue woes
RE
SummaryQuotesChartsNewsHeatmapComponents 
News SummaryAll newsNews of the components ofMarketScreener Strategies

Fund managers gird for long trade war after FedEx slide

share with twitter share with LinkedIn share with facebook
share via e-mail
0
09/20/2019 | 09:01pm EDT
Traders work on the floor at the NYSE in New York

NEW YORK (Reuters) - A profit warning and muted outlook from package delivery company FedEx Corp is prompting some high-profile fund managers to prepare for the trade war between the United States and China to last longer than many had originally anticipated.

Shares of the shipping company, whose business is often seen as a proxy for growth in the global economy, tumbled 13% Wednesday, a day after it said it planned to ground some planes and cut costs due to the effects of the trade war between the world's two largest economies.

"We were hopeful of a trade deal and some sort of return to normalcy and that has not taken place," FedEx's chief executive, Frederick Smith, said on its earnings call.

Companies ranging from parts supplier O'Reilly Automotive to network gear maker Juniper Networks have said the trade war is weighing on their earnings. Yet investors have focused more on FedEx because the nature of its business touches several industries across the globe, including consumer spending.

An extended trade war could take the wind out of the sails of the rally in the S&P 500 benchmark index, which has advanced in line with expectations for an imminent breakthrough in the trade war. High-level talks between the two countries are expected to resume again in October. The conflict between the two countries could take a decade to resolve, White House economic adviser Larry Kudlow warned on Sept. 6.

As a result, fund managers are moving away from U.S. industrials and technology companies that may be most affected by higher tariffs and instead are looking to pick up some out-of-favor companies and assets that offer long-term opportunities despite the trade war.

"It's obvious that China will try to drag this out as long as it can and hope it disappears after the (2020 presidential) election," said Brian Yacktman, whose YCG Enhanced Fund is up nearly 31% for the year to date.

Yacktman is moving more into the shares of European luxury goods makers such as Kering, whose brands include Gucci and Botegga Veneta, that have pricing power but have fallen on concerns about a slowdown in the Chinese economy. Shares of Kering are up 12.4% for the year to date, including a 10% drop over the last three months.

"These are companies that can just pass tariffs on because people want to buy the status symbol," he said.

Emily Roland, co-chief investment strategist at John Hancock Investment Management, said her firm has been increasing its "measures of protection" against an economic downturn caused in part by an escalating trade war. Despite a 20.1% gain in the sector this year, she said she still sees opportunities in utilities companies due in part to their above-average dividend yields and growth potential.

"Rather than reacting and getting whipsawed by the sudden shifts in sentiment, we believe that investors can create diversified portfolios that seek to minimize downside risks from the trade war, however long it may last," she said.

Not all fund managers are convinced the trade war is here to stay. "We still think one way or another Trump will end it before the election," said Lamar Villere, a portfolio manager at New Orleans-based Villere & Co.

As a result, he has been moving more assets into sectors such as semiconductors, an industry which will be included in $50 billion worth of goods that will be subject to 30% tariffs starting Oct. 1.

"The market is giving you opportunities because we think that this is more of a blip than anything else," he said.

Emmanuel Roman, chief executive officer at bond giant Pimco, said Thursday at the CNBC Institutional Investor Delivering Alpha Conference that he is seeing opportunities in emerging market bonds due to the pessimism from the trade war.

"Obviously the big elephant in the room is the trade war with China and how it will resolve itself," he said.

(Reporting by David Randall; Editing by Alden Bentley and Leslie Adler)

By David Randall

Stocks mentioned in the article
ChangeLast1st jan.
DJ INDUSTRIAL -0.15% 26788.1 Delayed Quote.14.84%
KERING 0.46% 478.05 Real-time Quote.16.14%
NASDAQ 100 -0.83% 7874.615602 Delayed Quote.24.31%
NASDAQ COMP. -0.72% 8104.295257 Delayed Quote.21.92%
O'REILLY AUTOMOTIVE, INC. -0.51% 400.4 Delayed Quote.16.28%
S&P 500 -0.36% 2995.99 Delayed Quote.19.51%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on S&P 500
01:16aNEWS HIGHLIGHTS : Top Global Markets News of the Day
DJ
01:07aAsia shares slip on Brexit snag, Texas Instruments' revenue woes
RE
01:06aAsia shares slip on Brexit snag, Texas Instruments' revenue woes
RE
12:56aWALL STREET STOCK EXCHANGE : Oil falls on U.S. stockbuild; deeper output cut pro..
RE
12:14aWALL STREET STOCK EXCHANGE : Oil falls on U.S. stockbuild; deeper output cut pro..
RE
10/22ASIA MARKETS: Asian Markets Slip On Renewed Geopolitical Uncertainty
DJ
10/22NEWS HIGHLIGHTS : Top Global Markets News of the Day
DJ
10/22Wall St. drops as Brexit strikes again
RE
10/22Wall Street slips after rejection of Brexit timetable
RE
10/22Pound, stocks slip as lawmakers reject Brexit law timetable
RE
More news
Chart S&P 500
Duration : Period :
S&P 500 Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends S&P 500
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Top / Flop S&P 500
BIOGEN INC. 281.87 Delayed Quote.26.11%
HARLEY-DAVIDSON 40.04 Delayed Quote.7.98%
UNDER ARMOUR, INC. 19.42 Delayed Quote.6.88%
L BRANDS, INC. 17.73 Delayed Quote.6.81%
CENTENE CORPORATION 48.75 Delayed Quote.6.51%
MCDONALD'S CORPORATION 199.27 Delayed Quote.-5.04%
CADENCE DESIGN SYSTEMS, INC. 62.94 Delayed Quote.-5.71%
KIMBERLY-CLARK CORPORATION 129.38 Delayed Quote.-7.05%
THE TRAVELERS COMPANIES 130.15 Delayed Quote.-8.29%
HASBRO, INC. 100.02 Delayed Quote.-16.76%
Heatmap :