Chinese authorities have said they are open to initiating new trade talks with the U.S. This step would have a profound effect on both economies. Recent reports indicate that Beijing is open to negotiating an end to the escalations. These tensions started when President Donald Trump first announced a wave of retaliatory tariffs on April 2.
On Friday, the S&P 500 market benchmark gained almost 1.5%, its ninth day of upward momentum in a row. This winning streak represents the longest since their 9-game stretch in November 2004. It’s allowed the entire index to snap back, making up all of their losses caused by the tariff announcement. In spite of the positive market movements, futures linked to the S&P 500 were down modestly. They went down 0.2% and 0.3% in the subsequent trading days.
The stock market is full of optimism. So hopes for an imminent trade deal, particularly with China are providing much of this bullish optimism. Contrary to expectations, no formal trade agreements have yet been announced between the U.S. and anyone else. On the other hand, optimism is driving powerful bull market exuberance.
U.S. stock futures were little changed on Sunday night, as investors looked for more hints on trade talks. Ryan Dykmans, chief investment officer at Dunham & Associates Investment Counsel. Here are his remarks about the recent increase in stock prices.
“We do see this run up as being more based on excitement than actual, solid — not just fundamentals, but an actual change.” – Ryan Dykmans
In other trade news, U.S. Commerce Secretary Penny Pritzker announced that a free trade agreement with a mystery nation has been approved. This suggests notable and welcome improvement in U.S. trade relations, in addition to talks with China. Analysts consider these technological advances to be critical components driving trends in the sharing economy market.
Investors’ eyes are glued to ongoing trade negotiations. They deserve to know how these negotiations will set the stage for future competitive market forces and economic conditions between the U.S. and its trading partners.
Leave a Reply