World stocks rebounded after positive signals from US-China negotiations

European-American stocks rebounded on Oct. 9 after speculation that China was willing to come to a partial agreement with the US at trade talks taking place this week.

On Wall Street, Dow Jones industrial index increased by 0.7% to 26,346.01 points. The S&P 500 also increased by 0.9% to 2,919.40 points, while the Nasdaq Composite technology index advanced by 1% and closed at 7,903.74 points.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 9, 2018. REUTERS/Andrew Kelly

On the other side of the Atlantic, European stock markets are also racing.

Specifically, the FTSE 100 index in London (United Kingdom) increased by 0.3% to 7,166.5 points, the CAC 40 index in Paris (France) recorded an additional 0.8% and reached 5,499.14 points. The DAX 30 index on the Frankfurt floor (Germany) advanced 1% to 12,094.26 points.

The EUR STOXX 50 composite index also inched 0.9% and closed at 3,459.14 points.

In the previous 9/10 session, markets dropped sharply after the new US sanctions on 28 Chinese entities led to a backlash from Beijing.

This move has made the situation more tense before the high-level trade talks between the two countries began on October 10 in Washington.

However, markets on both sides of the Atlantic bounced back after reports emerged that a smaller scale deal was still within reach, as Beijing agreed to buy more American agricultural products. In exchange for Washington’s delay in implementing new tariff measures.

This information helped relieve some of investors’ insecurity when it was less than a week before the next US sanctions tax will take effect on October 15.

LBBW expert Karl Haeling said the hope rekindled even though everything seemed to be deadlocked before.

However, senior market analyst Craig Erlam at investment brokerage firm Oanda noted that the market has repeatedly misjudged the signals surrounding previous trade talks.

He said that investors were quick to respond very positively to the more optimistic outlook of the negotiations at this time. But there has been a lot of “jamming signal” surrounding previous talks and this may be just the same.

Investors Bet on Stock Market

Despite worries of the economic downturn, Wall Street investors still bet on the stock market, helping Wall Street reverse its rebound in Wednesday session (August 28).

Following the decline of Tuesday session, US stocks continued to open in the red on Wednesday as worries about economic recession and mixed statements of US-China senior leaders on trade negotiations. trade. However, very soon after that, Wall Street reversed its recovery thanks to financial and energy stocks.

Financial stocks rebounded to regain all of what was lost in the previous session, and information of US oil inventories decreased, helping crude oil prices rose 1.5% to support the rise of energy stocks. Another point, on Wednesday, the yield of 30-year US government bonds fell to a record low, lower than the average dividend yield of the S&P 500, causing investors to abandon bonds and pour money. back to stocks, despite fears of recession and the US holding the decision to increase taxes by 5% to $ 300 billion of Chinese goods from September 1 and December 15.

Next week, investors will look at monthly employment reports and manufacturing data that could guide expectations about another possible rate cut from the Federal Reserve System – Fed at its mid-September meeting.

At the end of August 28, the Dow Jones increased by 258.20 points (+ 1.00%) to 26,036.10 points. The S&P 500 index increased by 18.78 points (+ 0.65%), to 2,887.94 points. The Nasdaq Composite Index increased by 29.94 points (+ 0.38%), to 7,856.88 points

Meanwhile, on the European stock market, the opposite movement continued to take place in the fourth session, but the position reversed. While German and French stocks dropped because investors were worried about the global recession, British stocks increased again when Brexit was chaotic, causing the pound to drop, thereby supporting the stock market.

US Stock Indexes All Rose After Reduction Taxes On Chinese Goods

US stock indexes all rose after a report said the US could reduce taxes on Chinese goods in its trade negotiations.
The idea was given by Finance Minister Steven Mnuchin, according to the Wall Street Journal. However, the report added that Mnuchin faced resistance from US Trade Representative Robert Lighthizer, who argued that any concessions could be considered a sign of weakness.

The report helped stocks to the highest level of the day, with the Dow Jones industrial average gaining more than 250 points. S&P 500 and Nasdaq Composite all gained about 1% after the report.

However, the main indexes failed to peak after the Ministry of Finance spokesman working with the trade group said: None of Mnuchin Minister and Ambassador Lighthizer made any recommendations for anyone involved in tariffs or other parts of negotiations with China. This is an ongoing process that has not yet achieved concrete results.

A senior government official who attended a trade meeting with the president on Wednesday told  that there was no discussion about tariff removal. Currently, the official also said that President Donald Trump was not interested in making a decision right now because that puts him in a weak position.

The Dow closed up 163 points, escaping from the correction. The S&P 500 ended the day up 0.76% while the Nasdaq rose 0.7%.

Caterpillar shares rose 2.2%, while Boeing increased 2%. Shares of Caterpillar and Boeing are considered the bell for global trade when operating these two companies in relation to foreign markets. Apple also increased 0.6%.

Netflix is ​​expected to report today. This stock is currently the brightest star in the market in 2019 when it has increased by more than 31%. Netflix’s profit will increase sharply after the online giant announced it would raise monthly subscription prices from 13 to 18 earlier this week.

Morgan Stanley reported profits and unimproved revenue for Wall Street. The company’s results have been pulled down by poor achievements in business enterprises and asset management. Morgan Stanley shares fell 4%. Citigroup, J.P. Morgan Chase and Wells Fargo also reported quarterly earnings this week.