America may soon be open for business, and we sure hope that when we open, customers show up.
But you know where they are really open for business?
Hate the People's Republic or love it, with the opening of Wuhan last night, it's a whole new ball game for the market of 1.4 billion people and we are seeing instant winners.
Both UPS and FedEx spent fortunes building out giant Chinese hubs. Their stocks are roaring, but they still aren't up enough. I think that Carol Tome at the helm of UPS is downright exciting as she was the CFO genius behind the transformation of Home Depot (HD) into the best run big box hardware store.
Everyone's been taking their shots at Apple (AAPL) , cutting numbers here, nipping numbers there. Me? I am salivating over the idea that Apple's 5G phone will be lapped up when a rejuvenated China queues up for the device. Remember, China was the spur of the last big upside, and I think that it, plus the service revenue gained when America has nothing to do, makes this stock one of the cheaper ones to buy on 2021 earnings.
Skyworks (SWKS) and Broadcom (AVGO) are fabulous plays on a China comeback. They sell to the majors in China and I think that telco business will be very strong in the second half of China this year. You know, I am a huge fan of Nvidia (NVDA) and it has a ton of business there. Hey who knows, maybe the Chinese will bless the deal with Mellanox (MLNX) , which would cause Nvidia's stock to spike immediately.
Now, let's get a little more aggressive. I have watched Caterpillar's (CAT) stock move up and I think a lot of people believe that it's because there might be an infrastructure bill on the way given our pending unemployment rise.
I think the stock of Caterpillar is up because the Chinese have pumped fortunes in stimulus to rebuild their economy and Caterpillar will fit in well. Now you have to know that Caterpillar is more levered these days to oil than it is China. Still, though, it will trade up on any comeback chatter.
There are so many reasons to like Nike (NKE) . But it is the China story that I am so excited about. When you get out of lockdown, you want to splurge and you splurge with Nikes. I was on the fence about Nike with the Olympics postponed, but now you have China as a second half story and the Olympics next year.
Finally, I think everyone knows that Starbucks' (SBUX) sales are soft in the United States. No kidding. But China is, and has always been, the growth story of the company. Many short sellers have told me that Luckin Coffee's (LK) been taking it to the Seattle giant. I don't know, seems Luckin might be Luck out, as in out of luck, given the fraud that's just been uncovered. Starbucks is back in expansion mode, playing offence in China.
Now there are plenty of ancillary stocks that have issues or I would be pushing them hard. Emerson (EMR) and 3M (MMM) have a ton of business in China, but Emerson's levered to oil and 3M has all sorts of operational concerns and I am not crazy about the ground water pollution problem. IBM's (IBM) got a steady business in China, but I don't think it's a needle mover. And the charitable trust owns Tyson (TSN) , which has sells a ton of food to china, but it has a lot of food service here that's stalled, to say the least.
With the opening of Wuhan, you have a real turn. It's worth participating in.