Please ensure Javascript is enabled for purposes of website accessibility

Why General Electric Stock Is Jumping on Tuesday

By Rich Smith - Updated Aug 13, 2019 at 12:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A partial truce on Chinese tariffs, combined with a big Chinese order, spark joy among GE investors.

What happened

According to President Trump's U.S. trade representative, the latest round of 10% tariffs to be applied to Chinese imports may not arrive as scheduled in September. Some goods on the $300 billion in Chinese products initially targeted may not get hit with tariffs until Dec. 15, while others may be excluded entirely. The news is lifting stocks all across the market today. Shares of General Electric (GE -0.65%), for example, were up 5% as of noon EDT. And tariff news isn't the only reason.

Chinese map merged with Chinese flag

Image source: Getty Images.

So what

In addition to benefiting from general elation in the market today, General Electric shares are getting a lift from some other China-specific news. On Tuesday, GE announced that it has secured two new 6F.03 gas turbine orders with China's Guangdong Lee & Man Paper Manufacturing, and with China Huadian Corporation (CHD).  

Lee & Man will buy two of the turbines for its gas-fired co-generation plant in Guangdong Province. CHD will buy two more for its phase 1 gas-fired co-generation project in Hubei Province.

Now what

GE did not disclose the price for its gas turbines, nor the value of either contract. I think it's probably safe to say, though, that the sales from the four gas turbines mentioned in GE's press release probably don't amount to anything like the $4-billion-plus increase in market capitalization GE got from today's rising stock price.

Still, the sales should tend to please the president, and could go a ways toward smoothing things over in the trade war -- which would not only be good for stock markets in general, but could also make further sales by GE to China easier in the future.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Electric Company Stock Quote
General Electric Company
GE
$75.25 (-0.65%) $0.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.