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GOLDMAN SACHS: Buy these 45 'global-facing' stocks set to benefit from the worldwide growth boom as the pace in the US begins to slow

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  • GS says US GDP growth will likely peak this quarter and decelerate for the rest of the year.
  • It sees growth remaining above consensus estimates and trend, which can delay a shift to defensives.
  • Meantime, global growth continues accelerating, which benefits stocks that follow economic trends.
  • See more stories on Insider’s business page.

US GDP growth is likely to peak this quarter and decelerate throughout the rest of the year as fiscal stimulus and economic reopening tailwinds reach their maximum impact and begin to dwindle away, according to Ben Snider, a strategist at Goldman Sachs.

While many nations in the world suffered heavy economic losses and struggled to kick-start activity after the coronavirus triggered a global economic downturn, the US was able to grow robustly from the beatdown. In the third quarter of 2020, US GDP grew at an annualized rate of 33.1% thanks in large part to businesses reopening and an increase in consumer spending.

“Although our economists believe the pace of US economic growth will peak in the next month or two, their 2Q forecasts for economic growth remain substantially above consensus estimates,” Snider wrote in a note to clients on Wednesday.

“In addition, they expect core PCE inflation will temporarily surge above the Fed’s 2% target. Both of these catalysts should benefit cyclical stocks.

The bank’s economists expect US growth to come in at 10.5% in the second quarter, which is the second-fastest quarterly growth rate since 1978. On top of that, their 7% GDP growth forecast for the second half of the year would still be above trend and consensus estimates, Snider said.

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Usually, in an environment that has positive and accelerating economic growth, the cyclical areas of the market do the best as they tend to follow economic trends. But afterward, when growth first starts to peak and decelerate, more defensive industries tend to outperform, he added.

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Still, the rotation from cyclicals to defensives might be delayed this time around. That’s because of strong growth expectations despite broad deceleration, economic data releases in coming weeks, and the conviction that global economic growth still hasn’t reached its peak, he said.

“Rapid vaccine distribution and exceptional fiscal stimulus have helped the US economy accelerate more quickly than most other economies around the world. Our economists expect non-US global growth will peak in 3Q 2021, coinciding with the peak growth rates in Europe, Japan, and EM ex. China, among other economies,” he added.

That bodes well for many cyclical pockets of the market, as many cyclical US equity industries follow both US and non-US economic trends. That means that the headwind of growth deceleration in the US could partly be canceled out by the acceleration of global growth, he added.

Furthermore, some industries within information technology, financials, communications services, and consumer discretionary outperformed the S&P 500 in periods where US economic growth was likely declining and non-US global growth was accelerating since 1998, he said.

He noted that in the past few weeks, “global-facing” cyclical stocks have started to outperform their US-facing counterparts, and that’s something that he expects will continue for months.

That being said, Snider named 45 S&P 500 stocks from cyclical industry groups with the highest foreign exposures to revenue. They are listed below in no particular order. We have included their corresponding tickers, market caps, industry groups, and the percentage of their revenues that did not come from the US as of 2019.

1. Newmont

nem stock


Ticker: NEM

Market cap: $53 billion

Industry group: Materials

Non-US revenues: 99%

Source: Goldman Sachs 

2. Monolithic Power Systems

mmpwr stock


Ticker: MPWR

Market cap: $17 billion

Industry group: Semiconductors

Non-US revenues: 97%

Source: Goldman Sachs 

3. Lam Research

lrcx stock


Ticker: LRCX

Market cap: $88 billion

Industry group: Semiconductors

Non-US revenues: 92%

Source: Goldman Sachs 

4. Nvidia

nvda stock


Ticker: NVDA

Market cap: $376 billion

Industry group: Semiconductors

Non-US revenues: 92%

Source: Goldman Sachs 

5. Maxim Integrated

mxim stock


Ticker: MXIM

Market cap: $25 billion

Industry group: Semiconductors

Non-US revenues: 89%

Source: Goldman Sachs 

6. Qualcomm

QCOM stock


Ticker: QCOM

Market cap: $152 billion

Industry group: Semiconductors

Non-US revenues: 89%

Source: Goldman Sachs 

7. Texas Instruments

txn stock


Ticker: TXN

Market cap: $170 billion

Industry group: Semiconductors

Non-US revenues: 87%

Source: Goldman Sachs 

8. Applied Materials

amat stock


Ticker: AMAT

Market cap: $118 billion

Industry group: Semiconductors

Non-US revenues: 87%

Source: Goldman Sachs 

9. KLA

klac stock


Ticker: KLAC

Market cap: $49 billion

Industry group: Semiconductors

Non-US revenues: 87%

Source: Goldman Sachs 

10. Teradyne

TER stock


Ticker: TER

Market cap: $21 billion

Industry group: Semiconductors

Non-US revenues: 85%

Source: Goldman Sachs 

11. Broadcom Inc.

avgo stock


Ticker: AVGO

Market cap: $187 billion

Industry group: Semiconductors

Non-US revenues: 81%

Source: Goldman Sachs 

12. International Flavors & Fragrances

iff stock


Ticker: IFF

Market cap: $35 billion

Industry group: Materials

Non-US revenues: 80%

Source: Goldman Sachs 

13. Intel

INTC stock


Ticker: INTC

Market cap: $255 billion

Industry group: Semiconductors

Non-US revenues: 78%

Source: Goldman Sachs 

14. Microchip Technology

MCHP stock


Ticker: MCHP

Market cap: $40 billion

Industry group: Semiconductors

Non-US revenues: 78%

Source: Goldman Sachs 

15. FMC

fmc stock


Ticker FMC

Market cap: $15 billion

Industry group: Materials

Non-US revenues: 77%

Source: Goldman Sachs 

16. BorgWarner

bwa stock


Ticker: BWA

Market cap: $11 billion

Industry group: Automobiles & Components

Non-US revenues: 77%

Source: Goldman Sachs 

17. Albemarle

ALB stock


Ticker: ALB

Market cap: $17 billion

Industry group: Materials

Non-US revenues: 76%

Source: Goldman Sachs 

18. Xilinx

xlnx stock


Ticker: XLNX

Market cap: $30 billion

Industry group: Semiconductors

Non-US revenues: 74%

Source: Goldman Sachs 

19. Baker Hughes

BKR stock


Ticker: BKR 

Market cap: $14 billion

Industry group: Energy

Non-US revenues: 74%

Source: Goldman Sachs 

20. Mosaic Company

MOS stock


Ticker: MOS

Market cap: $12 billion

Industry group: Materials

Non-US revenues: 74%

Source: Goldman Sachs 

21. Advanced Micro Devices

AMD stock


Ticker: AMD

Market cap: $96 billion

Industry group: Semiconductors

Non-US revenues: 74%

Source: Goldman Sachs 

22. Schlumberger

SLB stock


Ticker: SLB

Market cap: $35 billion

Industry group: Energy

Non-US revenues: 72%

Source: Goldman Sachs 

23. Linde plc

lin stock


Ticker: LIN

Market cap: $149 billion

Industry group: Materials

Non-US revenues:  70%

Source: Goldman Sachs 

24. DuPont

dd stock


Ticker: DD

Market cap: $40 billion

Industry group: Materials

Non-US revenues: 69%

Source: Goldman Sachs 

25. Analog Devices

adi stock


Ticker: ADI

Market cap: $59 billion

Industry group: Semiconductors

Non-US revenues: 66%

Source: Goldman Sachs 

26. Freeport-McMoRan

FCX stock


Ticker: FCX

Market cap: $52 billion

Industry group: Materials

Non-US revenues: 65%

Source: Goldman Sachs 

27. NOV

nov stock


Ticker: NOV

Market cap: $5 billion

Industry group: Energy

Non-US revenues: 63%

Source: Goldman Sachs 

28. Aptiv

APTV stock


Ticker: APTV

Market cap: $36 billion

Industry group: Automobiles & Components

Non-US revenues: 63%

Source: Goldman Sachs 

29. Air Products & Chemicals

APD stock


Ticker: APD

Market cap: $63 billion

Industry group: Materials

Non-US revenues: 62%

Source: Goldman Sachs 

30. Ingersoll Rand

IR stock


Ticker: IR

Market cap: $21 billion

Industry group: Capital Goods

Non-US revenues: 59%

Source: Goldman Sachs 

31. NIKE

NKE stock


Ticker: NKE

Market cap: $162 billion

Industry group: Consumer Durables & Apparel

Non-US revenues: 59%

Source: Goldman Sachs 

32. Westinghouse Air Brake Technologies

wab stock


Ticker: WAB

Market cap: $15 billion

Industry group: Capital Goods

Non-US revenues: 59%

Source: Goldman Sachs 

33. General Electric

GE stock


Ticker: GE

Market cap: $115 billion

Industry group: Capital Goods

Non-US revenues: 59%

Source: Goldman Sachs 

34. Facebook

fb stock


Ticker: FB

Market cap: $728 billion

Industry group: Media & Entertainment

Non-US revenues: 57%

Source: Goldman Sachs 

35. PVH

pvh stock


Ticker: PVH

Market cap: $7 billion

Industry group: Consumer Durables & Apparel

Non-US revenues: 57% 

Source: Goldman Sachs 

36. MSCI

MSCI stock


Ticker: MSCI

Market cap: $39 billion

Industry group: Diversified Financials

Non-US revenues: 55%

Source: Goldman Sachs 

37. Corteva

ctva stock


Ticker: CTVA

Market cap: $35 billion

Industry group: Materials

Non-US revenues: 55%

Source: Goldman Sachs 

38. Qorvo

QRVO stock


Ticker: QRVO

Market cap: $21 billion

Industry group: Semiconductors

Non-US revenues: 55%

Source: Goldman Sachs 

39. Citigroup

C stock


Ticker: C

Market cap: $146 billion

Industry group: Banks

Non-US revenues: 54%

Source: Goldman Sachs 

40. Emerson Electric

EMR stock


Ticker: EMR

Market cap: $55 billion

Industry group: Capital Goods

Non-US revenues: 54%

Source: Goldman Sachs 

41. Alphabet

googl stock


Ticker: GOOGL

Market cap: $1,432 billion

Industry group: Media & Entertainment

Non-US revenues: 54%

Source: Goldman Sachs 

42. Netflix

nflx stock


Ticker: NFLX

Market cap: $243 billion

Industry group: Media & Entertainment

Non-US revenues: 53%

Source: Goldman Sachs 

43. Willis Towers Watson

WLTW stock


Ticker: WLTW

Market cap: $31 billion

Industry group: Insurance

Non-US revenues: 52%

Source: Goldman Sachs 

44. Garmin

grmn stock


Ticker: GRMN

Market cap: $26 billion

Industry group: Consumer Durables & Apparel

Non-US revenues: 52%

Source: Goldman Sachs 

45. Xylem

xyl stock


Ticker: XYL

Market cap: $19 billion

Industry group: Capital Goods

Non-US revenues: 51%

Source: Goldman Sachs