The potential big ASX stock losers from a US-China trade war ceasefire

Welcome back the great risk-on trade as market bulls come charging back on to the ASX after the US and China call a time-out on their growing trade spat.

But the overwhelmingly bullish sentiment on the market today harbours a dark side that poses a threat to a number of ASX stocks.

This risk is easy to overlook today though as the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) enjoyed its best gain in nearly two years as the index jumped 1.8% with all sectors trading in the black.

Double-edged Sword

The market rally comes as the risk to a full-blown trade war between the world’s two largest economies eased after US President Donald Trump and his Chinese counterparty Xi Jinping agreed to refrain from slapping fresh tariffs on each other.

Xi is dangling a big carrot in front of Trump if the US agrees to back-off on the trade war. China agreed to buy a “very substantial” amount of energy, agriculture and industrial goods from the US as part of the ceasefire, according to a report in the Australian Financial Review.

Details are scant so it may be too early to quantify what impact the new deal will have on our listed agriculture and energy sectors.

Potential Losers

Investors in our oil & gas stocks aren’t worried though as that is the best performing sector on our market today with the Santos Ltd (ASX: STO) share price surging 8.7% to $6.00, Oil Search Limited (ASX: OSH) share price jumping 5.1% to $7.68 and Woodside Petroleum Limited (ASX: WPL) share price improving 3.5% to $32.16.

There also didn’t seem to be many signs of stress among agriculture-related stocks.

The Graincorp Ltd (ASX: GNC) was leading the pack with a near 27% surge to $9.25 on a takeover offer, although the Nufarm Limited (ASX: NUF) share price, A2 Milk Company Ltd (ASX: A2M) share price, Elders Ltd (ASX: ELD) share price and Rural Funds Group (ASX: RFF) share price also enjoyed strong gains today.

But there were some spots of weakness in the sector although it’s hard to say if this has anything to do with the new China-US deal.

The fruit and veg distributor Costa Group Holdings Ltd (ASX: CGC) share price dipped slightly into the red as cattle breeder Australian Agricultural Company Ltd (ASX: AAC) tumbled 1.3% to $1.18.

Foolish Takeaway

Investors will need to pay close attention to the developing bilateral US-Sino trade deal as global peace on the trade front can have a nasty sting in the tail.

It also shouldn’t be lost on investors that Trump’s push to make America first means friends and allies may get pushed off the platform.

With friends like that, who needs enemies?

NEW! Top 3 Dividend Bets for 2019

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. The first two currently offer fat, fully franked yields. The last is a surprising REIT offering you the benefits of being a landlord with none of the hassle! You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

Motley Fool contributor Brendon Lau owns shares of Nufarm Limited. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Elders Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now