A truce in the U.S.-China trade war has sparked a relief rally across risk assets, but these stocks are really cheering.
The biggest winners from the ceasefire are chipmakers. Semiconductors not only benefited from the agreement between President Donald Trump and Chinese President Xi Jinping to hold off on new tariffs, but also from Trump's decision to ease his ban on American companies selling products to Chinese telecom giant Huawei.
Goldman Sachs scanned 2018 company filings to find the companies with the highest sales exposure to Greater China in the Russell-1000 Index. The list is concentrated in chipmakers, including Qorvo, Qualcomm, Micron Technology, Nvidia, Broadcom and Intel.
The group is leading Monday's rally with Skyworks soaring 6%, Western Digital up 4.4%, Micron up nearly 4%, while Broadcom jumped more than 4%. The VanEck Vectors Semiconductor ETF, which includes the top S&P 500 chipmakers, rose over 2.7% on Monday.
Other stocks on Goldman's list are also rallying on the trade truce. Fiber laser manufacturer IPG Photonics and integrated power solutions company Monolithic Power Systems climbed 1.5% and 2.1% respectively.
Another group of big winners is the retailers that are sensitive to tariffs. UBS warned last month that certain retailers with high percentage of merchandise exposed to Chinese duties have "significant risk" as higher tariffs would stoke rising costs for the imported goods they sell.
"The brunt of a full 25% tariff would likely be quite inflationary as the retailers have indicated they would use strategic price actions, where possible to mitigate the impact," said Michael Lasser, equity analyst at UBS.
Floor & Decor has about 45% products sold to China, according to UBS estimates based on company reports and conference calls. The flooring retailer's stock was up about 1% on Monday. Other retailers sensitive to tariffs include Advance Auto Parts and Restoration Hardware, whose stocks gained 1.6% and 2.8% respectively.