Trump Postponing Tariff Hike Buoys Buying Interest

February 25, 2019
trump anti-globalisation

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Monday, with positive developments on the trade front generating buying interest.

The upward momentum on Wall Street comes after President Donald Trump announced he intends to postpone a planned increase in U.S. tariffs on Chinese imports.

Trump said the decision to delay the tariff increase reflected ?substantial progress? in the ongoing trade talks between the U.S. and China.

The president said the U.S. and China have made progress on ?important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues.?

Assuming additional progress is made, Trump said he will be planning to meet with Chinese President Xi Jinping to conclude an agreement.

Trading activity may be somewhat subdued, however, as traders look ahead to the second summit between Trump and North Korean leader Kim Jong Un.

?With complete Denuclearization, North Korea will rapidly become an Economic Powerhouse,? Trump said on Twitter ahead of the summit. ?Without it, just more of the same. Chairman Kim will make a wise decision!

Federal Reserve Chairman Jerome Powell?s testimony before Congress in the coming days may also keep some traders on the sidelines.

Stocks moved mostly higher over the course of the trading day on Friday, more than offsetting the moderate weakness seen on Thursday. With the upward move, the major averages reached their best closing levels in over three months.

The major averages fluctuated late in the session but ended the day firmly positive. The Dow climbed 181.18 points or 0.7 percent to 26,031.81, the Nasdaq jumped 67.84 points or 0.9 percent to 7,527.54 and the S&P 500 rose 17.79 points or 0.6 percent to 2,792.67.

For the holiday-shortened week, the Nasdaq advanced by 0.7 percent, while the Dow and the S&P 500 both climbed by 0.6 percent.

The strength on Wall Street came as traders continued to express optimism about ongoing trade talks between the U.S. and China.

Treasury Secretary Steve Mnuchin revealed later in the day that Chinese negotiators will extend their visit to Washington in an effort to build on the progress made during this week’s talks.

Mnuchin told reporters a meeting between Trump and Xi reportedly under discussion for next month may depend on the outcome of the next few days of negotiations.

Meanwhile, Trump said during a meeting with Chinese Vice Premier Liu that U.S. and Chinese officials are making “a lot of progress” in the trade talks.

Trump said there was a “very good chance” the U.S. and China could reach a long-term trade deal but at the same time said “who knows” whether a final agreement will be struck.

A report from CNBC said China has committed to buying up to $1.2 trillion worth U.S. goods, although sources said the two sides remain far apart on issues concerning the forced transfer of intellectual property.

Trading activity was somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

A batch of disappointing U.S. economic data weighed on the markets on Thursday, although trade talk optimism helped limit the downside.

Tobacco stocks saw considerable strength on the day, extending the strong upward move seen in recent sessions. The NYSE Arca Tobacco Index surged up by 2.6 percent to its best closing level in well over three months.

Significant strength was also visible among computer hardware and networking stocks, with the NYSE Arca Computer Hardware and NYSE Arca Networking Index jumping by 2 percent and 1.7 percent, respectively.

Reflecting optimism about increased Chinese demand, steel stocks also turned in a strong performance, driving the NYSE Arca Steel Index up by 1.4 percent.

Biotechnology, software, and housing stocks also moved notably higher, while telecom stocks bucked the uptrend by the broader markets.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

Leave a Reply

Nigerian Stocks
Previous Story

Stocks Gain N68b as Nigerians Await Presidential Poll Results

European Stocks Rise Amid Brexit Talks
Next Story

European Stocks Rise Amid Brexit Talks

Latest from Economy