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Stock-Shoppers Paradise: Trade-Induced Market Selloff Could Mean Opportunity

Credit: The Street
Published on August 5, 2019 - Duration: 02:47s

Stock-Shoppers Paradise: Trade-Induced Market Selloff Could Mean Opportunity

When markets sell off on big, scary breaking news, there are usually some stocks that are easy buys.

Enter Monday.

On this day, Chinese officials announced they were devaluing the Yuan, causing the currency to fall to its lowest level against the dollar in 10 years.

This was designed to make the country's exports more attractive to buyers, as President Trump had threatened Thursday to tariff Chinese imports to the U.S. by an additional 10% to 25%.

The Chinese decision signaled to the U.S. market that a trade resolution is quite far away.

The Dow Jones Industrial Average fell by more than 700 points Monday.

But services and software tech stocks that shouldn't be very impacted -- and certainly not directly impacted -- have been tanking in the past five days, and could be oversold.

Here's a list of such stocks, and there trailing five-day moves.

Facebook -6.2% Amazon -6.3% Apple -11.4% (past four days) Importantly, Apple's products are very much targeted by the potential tariffs, and Cowen analysts say the tech behemoth could see 2020 earnings per share fall by 11%, which could in turn cause the stock to fall roughly 11% more from its current level.

Apple is likely the outlier on this list of potentially oversold stocks.

Netflix -6.7% Alphabet -5.9% Microsoft -5.6% Adobe -7.8% IBM -6% Twilio -12% Salesforce -7.7% "After today {Monday}, you'll look at stocks and you'll come home and say, 'wow, I can't believe that stock got to this level'," Jim Cramer said Monday morning, in reference to oversold stocks in the face of the market selloff.

Cramer also said, "I'm looking at IBM because of a catalyst." Want to get my ICYMI newsletter everyday?

Just sign up here and follow me, Jacob Sonenshine, on Twitter @SonenshineJ Facebook, Amazon, Apple and Google, Microsoft, Twilio and Salesforce are holdings in Jim Cramer's Action Alerts PLUS member club.

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