US President Donald Trump and China’s Xi Jinping have agreed to restart trade talks, sending companies like Bellamy’s Australia Ltd (ASX: BAL) and Fortescue Metals Group Ltd (ASX: FMG) higher.
Is There a Truce?
Not quite.
Donald Trump and Xi Jinping have reportedly had a lengthy meeting at the G20 Summit in Osaka. Trump has said that existing tariffs will remain on Chinese imports for now, but additional tariffs that were being threatened will not go forward.
The renewal of the discussions and the assurance that further tariffs are not about to hit China has helped push the S&P/ASX 200 (INDEXASX: XJO) higher today.
In particular, infant formula companies have benefitted. Bellamy’s and Bubs Australia Ltd (ASX: BUB) were both trading around 4% higher earlier today while The a2 Milk Company Ltd (ASX: A2M) rose as much as 1%.
In the metals sector, Fortescue and South32 Limited (ASX: S32) shares are both moving higher today as well.
Is the End in Sight?
I’d say it’s too early to call the beginning of the end for the trade war. All of the companies mentioned above remain exposed to any changes to tariffs or regulations and they should be considered riskier investments at the moment.
While renewed discussions is a positive sign, I’d still feel more comfortable investing in one of the high-quality companies mentioned in the free report below.
[ls_content_block id=”14945″ para=”paragraphs”]
Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.
