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Cramer flags Mastercard and Visa's 'unbeatable' hedges against China trade fears

CNBC 7/11/2018 Elizabeth Gurdus

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Mastercard & Visa's hedges against China trade fears

CNBC

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Two of the market's most high-profile financial technology stocks have "unbeatable" safeguards against the United States' growing conflict with China, CNBC's Jim Cramer said on Wednesday.

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"Mastercard and Visa: that's a one-two punch that may be an unbeatable combination," the "Mad Money" host said after shares of the credit card giants hit fresh 52-week highs intraday.

On a day when stocks were dragged down by the Donald Trump administration's release of a new list of tariffs on China, Cramer flagged Mastercard and Visa as both safe havens and potentially positive influences on the growing conflict.

"They're not allowed to do business in China, which makes them anti-China stocks, but get this: they’re also the best way for the Chinese to show that they’ve blinked," he said.

Tuesday's release from U.S. Trade Representative Robert Lighthizer included more forceful language in explaining the United States' fresh tariff list, which proposed duties on $200 billion worth of Chinese goods.

"As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports," the statement said. "This is an appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies."

But Cramer argued that if Chinese authorities gave Mastercard CEO Ajay Banga or Visa CEO Al Kelly a call and invited them to do business in China, it could be enough to stem the escalating trade conflict.

"A simple call to Ajay Banga over at Mastercard or Al Kelly over at Visa to tell them they are welcome to come in wihtout a bogus joint venture might actually be enough to get President Trump to call off the trade dogs of war," the "Mad Money" host said. "That ... is why their stocks joined the all-time high list on a day like today."

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