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Nicolas Asfouri / AFP / Getty Images
- The US stock indexes may be trading just below the highs, but they have suffered in the last year as a direct result of the US-China trade war.
- Beneath the surface, each segment of the stock market – particularly the trade-sensitive industries, such as agriculture and aerospace – has responded in different ways to the evolution of the trade war.
- Deutsche Bank's equity strategists have identified, on the basis of their badysis of the flow data, the exchange-traded funds most vulnerable to exchange rhetoric in a new investor guide.
- Visit the Markets Insider homepage for more stories.
On the surface, the stock market seems to have resisted the obstacles presented by the trade war between the United States and China. The leading US indexes are at a striking distance from their all-time highs and have just released their best weeks of 2019.
However, a new sector badysis shows that investors have fled the corners of the market, tormented by the trade dispute, even as broader markets have recovered.
According to an badysis of the exchange-traded fund flows (ETF) carried out by Deutsche Bank over the last two years, tradable index funds linked to trade tensions recorded an increase in activity in May, a particularly brutal month for actions.
The company has created a guide detailing some of the largest ETFs that have recorded notable "crisis of anxiety" movements in the trade war – and should see increased volatility this month in the face of lingering tensions between Washington and Beijing.
Strategists Chin Okoro and Hallie Martin focused on the eight stock markets or sectors they considered the most sensitive to the rhetoric of trade: Chinese market, semiconductors, Mexican equities, agriculture, metals, mining, electronics, aerospace and retail.
"DB economists are expecting a further escalation of trade stress in June, highlighting the retaliation measures taken by China in response to US measures against Huawei," the firm writes. "In addition, any signs of easing current tensions would likely materialize after the G20 summit."
Markets Insider has selected an ETF in each of the commercially-sensitive sectors defined by Deutsche Bank and distributed them below. ETFs are rated from the least performers to the best performers:
VanEck Vectors Gaming ETF
Alberto E. Rodriguez / Getty Images
This fund follows: Shares in the gaming, sports betting and gaming technology industries
Performance over 1 year: -26%
SPDR S & P Retail ETF
Reuters
Teleprinter: XRT
This fund follows: Stocks in the retail space, including names of clothing and department stores
Performance over 1 year: -17%
IShares China Large Cap ETF
Reuters
Teleprinter: FXI
This fund follows: Chinese shares
Performance over 1 year: -15%
ETF iShares PHLX Semiconductor
Reuters
Teleprinter: SOXX
This fund follows: Stocks of semiconductors
Performance over 1 year: -1.5%
VanEck Vectors Agribusiness ETF
Juan Carlos Ulate / Reuters
Teleprinter: moo
This fund follows: Stocks in the agricultural industry such as agrochemicals, fertilizers and seeds
Performance over 1 year: -0.2%
iShares MSCI Mexico ETF
Associated press
Teleprinter: EWW
This fund follows: Mexican shares
Performance over 1 year: + 1%
ETF VanEck Vectors Gold Miners
REUTERS / Rick Wilking
Teleprinter: GDX
This fund follows: Shares of gold miners
Performance over 1 year: +2.5%
SPDR S & P Aeronautics & Defense ETF
Reuters
Teleprinter: XAR
This fund follows: Aerospace and defense stocks listed in the United States
Performance over 1 year: + 10%
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