The “phase one” trade agreement was finally signed Wednesday, putting the two-year-old trade war between the U.S. and China on ice.
“There’s a great sense of welcome that the deal was signed and a little bit of relief, naturally, and some measured optimism about how we can move forward,” said American Chamber of Commerce in China chairman Gregory Gilligan.
China has agreed to purchase an an additional $200 billion worth of U.S. goods over the next two years as part of the partial deal, and has agreed to crack down on intellectual property theft and the forced transfer of American technologies.
However, Seymour Asset Management’s Tim Seymour noted that the deal still leaves “us with a lot of uncertainty,” adding that China “got largely what they wanted.”
“I think it was an agreement that was politically important on the U.S. side, and I think we still have a whole lot of uncertainty,” Seymour said.
Still, the signing of the deal has sparked optimism in the market and CNBC’s Jim Cramer says there are a handful of stocks worth considering now.
“If the stocks of any of these companies with new access to China get hit, I think you need to be a buyer into weakness,” the host said. “I’m just hoping the market’s general sense of ennui gives you that opportunity.”
In particular, Cramer has his eye on a few financial and tech names, including Mastercard (NYSE: MA), Visa (NYSE: V), JPMorgan (NYSE: JPM), Goldman Sachs (NYSE: GS), and Apple (NASDAQ: AAPL), which recently launched its own credit card in partnership with Goldman.
“The whole credit card industry has been praying to get into China to no avail, until now,” Cramer said. “Numbers could go up gigantically, which means the group likely has more room to run.”
Cramer isn’t the only on bullish on these stocks.
MoffettNathanson analyst Lisa Ellis wrote in a note last week that Mastercard and Visa are “in rarefied air among investment opportunities.”
Ellis reiterated her Buy rating on both stocks in the note and her price targets suggested double-digit upside ahead.
And on Wednesday, Canaccord Genuity analyst T. Michael Walkley reiterated his Buy rating for Apple and raised his price target from $275 to $355 – 14% higher than the current price.
As for JPMorgan and Goldman Sachs, both investment banks reported earnings this week, with JPMorgan delivering a blowout quarter and Goldman Sachs delivering a more modest beat. Both stocks have seen gains this week, with Goldman shares up 3% over the last week and JPM shares adding 2.6% on Tuesday.
The other stock Cramer says investors should consider is FedEx (NYSE: FDX).
FedEx may have struggled recently, but Cramer sees opportunity for the company now that the U.S. and China have agreed to a ceasefire.
“They’ve spent fortunes building out their Chinese business, and it had just gotten to the point where it could be immensely profitable before the trade war pretty much shut them down,” Cramer said. “Now FedEx can make a comeback.”