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Author Topic: Markets Tech Rebound Fuels Stock Gains Amid Trade Tensions: Markets Wrap  (Read 0 times)

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Tech Rebound Fuels Stock Gains Amid Trade Tensions: Markets Wrap


By Vildana Hajric  and Sarah Ponczek
September 18, 2018, 5:13 AM GMT+7 Updated on September 19, 2018, 3:05 AM GMT+7


  • Beijing, Washington exchange fresh blows in tariff dispute
  • Oil jumps as Saudis said to be comfortable with $80 Brent



Global equity markets climbed Tuesday, shrugging off the latest salvos in the trade war between the U.S. and China. Treasuries retreated and oil rose.

President Donald Trump announced 10 percent tariffs on $200 billion in Chinese goods to start later this month. The rate would jump to 25 in January if Beijing refuses to offer concessions. China, in return, said it would levy duties on $60 billion of U.S. goods.

Still, the S&P 500 Index registered its biggest gain in almost three weeks, led by technology stocks, which had been hammered in Monday’s session. Asia equities recovered from early weakness, with benchmarks in Japan and Shanghai jumping. The Stoxx Europe 600 Index also closed higher.

“The market is properly looking at this as a type of de-escalation of the escalated tensions,” said Brian Jacobsen, a multi-asset strategist at Wells Fargo Asset Management. “The 10 percent tariffs are weaker than the 25 percent originally threatened. China retaliated with $60 billion compared to the U.S.’s $200 billion. This could be the start of the tapering of trade tensions.”

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In this article
CL1
WTI Crude
69.83USD/bbl.-0.02-0.03%
SPX
S&P 500
2,904.31USD+15.51+0.54%
BBDXY
Bloomberg Dollar Spot
1,178.49USD-0.35-0.03%
WFC
WELLS FARGO & CO
54.50USD+0.19+0.35%
Global equity markets climbed Tuesday, shrugging off the latest salvos in the trade war between the U.S. and China. Treasuries retreated and oil rose.

President Donald Trump announced 10 percent tariffs on $200 billion in Chinese goods to start later this month. The rate would jump to 25 in January if Beijing refuses to offer concessions. China, in return, said it would levy duties on $60 billion of U.S. goods.

Still, the S&P 500 Index registered its biggest gain in almost three weeks, led by technology stocks, which had been hammered in Monday’s session. Asia equities recovered from early weakness, with benchmarks in Japan and Shanghai jumping. The Stoxx Europe 600 Index also closed higher.

“The market is properly looking at this as a type of de-escalation of the escalated tensions,” said Brian Jacobsen, a multi-asset strategist at Wells Fargo Asset Management. “The 10 percent tariffs are weaker than the 25 percent originally threatened. China retaliated with $60 billion compared to the U.S.’s $200 billion. This could be the start of the tapering of trade tensions.”


Treasuries declined, pushing the yield on 10-year U.S. bonds above 3 percent, as most European government bonds drifted lower. Italian debt dropped earlier after a report of yet more tension over the country’s impending budget, though it later reversed the move after Finance Minister Giovanni Tria spelled out his fiscal balancing act at a Bloomberg event.

Trump had vowed to increase pressure on China if the Asian nation retaliated against U.S. tariffs, which raises the risk of even more escalation between the world’s two biggest economies. However the rhetoric has been running for months, and many assets have priced in rising tensions, helping to cushion the latest blows.

Elsewhere, the Australian dollar shrugged off trade concerns to reverse earlier losses as the central bank reaffirmed its next interest-rate move would likely be higher. Turkey’s lira fell for a third day. The U.S. dollar fluctuated. Oil jumped after Saudi Arabia expressed comfort with Brent oil prices rising above $80 a barrel. West Texas crude briefly breached $70 a barrel.



Ref. bloomberg


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