Goldman Sachs says the impact of the coronavirus will be 'limited' and investors should look to cyclical and value stocks.
The market can’t make its mind up over the coronavirus. After closing at record levels last week, the three benchmark indexes slipped on Friday as optimism over the virus subsided. U.S. stocks climbed tentatively higher on Monday as investors worked out what to make of the latest developments.
In our call of the day, Goldman Sachs analysts said the economic impact will be limited and investors should look to cyclical and value stocks. The bank’s sector-neutral dividend growth basket of 50 stocks has “declined sharply” alongside cyclicals and trades with depressed valuations.The basket’s stocks set to outperform the most are semiconductor company Skyworks SWKS, +1.33% , IT services provider DXC DXC, -1.73% , hotel and casino operator Wynn Resorts WYNN, -1.08% , technology company Broadcom AVGO, -1.11% , and manufacturer of construction equipment Caterpillar CAT, +0.46% , the note said.
Volkswagen has postponed production at some of its plants in China over the spread of the coronavirus, the company said on Saturday. Saic Volkswagen — a joint venture between the German car maker and Saic Motor Corp — said production had been halted until Feb. 17 but production in Shanghai would restart on Monday.
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