There’s no doubt every investor is glued on the edge of his or her seat as the US government shutdown continues.
What’s amazing is the mere agreement between Republicans and Democrats to head back to the negotiation table sparked a massive 2-day, 50-point rally in the S&P 500!
But the major stock indices aren’t the only thing that popped on the potential for resolution…
In just the last trading session, quite a few small cap and penny stocks rallied as well. The penny stocks I see worth watching are the Chinese-based industrial goods stocks.
You see, the Chinese economy benefits when the US economy is on track. And once the US resolves their budget dispute, we’re bound to see the US economy pick back up where it left off- in growth mode!
So why the industrial goods stocks? Well, I’ll give you two reasons…
First, as I just stated, a resolution of the budget dispute by the US government will put the US economy back on track, driving demand out of China. It’s become a truly global economy, and China depends just as much on us as we do on them for growth.
But the more interesting reason has to do with the headline-driven rebound of a number of penny stocks in this industry. Many of these stocks popped by 10% or more on Friday’s US news.
Here’s a short list of Asian industrial goods stocks that saw shares rally Friday-
- Highway Holdings (HIHO) – 13.8%
- Highpower International (HPJ) – 13.4%
- Global-Tech Advanced Innovations (GAI) – 13%
- China BAK Battery (CBAK) – 24.4%
These stocks, and a number of other players in this space, could really take off if an actual resolution in the US budget battle comes to pass. Just look at what a mere step forward in negotiations did for this group.
Keeping you one step ahead,