por admin » Jue Nov 07, 2019 9:33 am
Dow rises more than 100 points to record after China says it has agreed with US to roll back tariffs
PUBLISHED 7 HOURS AGO UPDATED 2 MINS AGO
Fred Imbert
@foimbert
CNBC.COM
Economy could be better than many people are expecting in 2020, strategist says
Economy could be better than many people are expecting in 2020, strategist says
The Dow Jones Industrial Average reached a record high on Thursday after China said the world's two largest economies had agreed to remove existing trade tariffs.
Trade bellwethers Caterpillar and Boeing were both up at least 0.7% in the premarket. Chip stocks such as Micron Technology, Advanced Micro Devices and Skyworks Solutions all gained at least 1% before the bell. Apple shares advanced 0.8%.
Gao Feng, a ministry spokesperson for China's Commerce Ministry, said that both sides had agreed to simultaneously cancel some existing tariffs on one another's goods, according to the country's state broadcaster. The ministry spokesperson said that both sides were closer to a so-called "phase one" trade agreement following constructive negotiations over the past two weeks.
Traders work on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor at the New York Stock Exchange.
One important condition for a limited trade agreement, Feng insisted, was that the U.S. and China must remove the same amount of charges at the same time.
It comes after reports that a meeting between President Donald Trump and Chinese President Xi Jinping could be postponed until December — delaying a chance for the two leaders to sign an interim trade deal.
"The last 24 hours have seen a bit of whiplash in the U.S./China trade drama, as a potentially negative headline yesterday has been more than offset by a positive one this morning," said Tom Essaye, founder of The Sevens Report, in a note to clients. But "it's fair to say that at these levels, the market is already partially pricing in removal of the tariffs that were implemented on September 1."
"That also means the risk is of disappointment is now real on an actual phase-one announcement, because if all we get is "what's expected" and we don't see any existing tariff removal, we could easily see a sell-the-news reaction in stocks," Essaye said.
Market participants had expected the two economic giants to sign a deal later this month, after both Washington and Beijing spoke of progress in talks late last week.
The U.S. and China have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
On the data front, the latest weekly jobless claims numbers came in at 211,000, down slightly from 218,000 in the previous week.
In corporate news, Booking Holdings, Disney and Activision Holdings are the companies set to report their latest quarterly figures after market close.
Qualcomm shares jumped more than 6% in the premarket after reporting Wednesday quarterly results that topped analyst expectations. The company's results were driven by strength in Qualcomm's licensing business.