Equities, yields regain some ground on trade deal hopes

NEW YORK (Reuters) – Stock indexes around the world fell for a fourth day in a row on Thursday, though Wall Street closed above session lows after comments from President Donald Trump about U.S.-China trade talks a day before the United States was due to raise tariffs.

Trump said Thursday afternoon he received a “beautiful letter” from Chinese President Xi Jinping asking to work together to “get something done.” Negotiators were to meet at 5 p.m. Eastern (2100 GMT) and continue talks through Friday.

Wall Street participants were still anxious but oil prices also pared losses after Trump’s comments. U.S. Treasury yields fell as investors sought safe havens and the dollar was down against Japan’s yen, though it regained some ground.

Earlier in the day China had asked the United States to meet it halfway in the hope of staving off threat of a U.S. tariff hike on $200 billion of Chinese goods to 25% from 10% at 12:01 a.m EDT (0400 GMT) on Friday.

“What the market fears deep down is an all-out trade war with no hope for resolution,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

“Trading today is telling me that the expectation for a trade deal is now that it’s likely to happen a bit sooner than months away or never,” he said.

The Dow Jones Industrial Average fell 138.97 points, or 0.54%, to 25,828.36, the S&P 500 lost 8.7 points, or 0.30%, to 2,870.72 and the Nasdaq Composite dropped 32.73 points, or 0.41%, to 7,910.59.

The pan-European STOXX 600 index lost 1.65% and MSCI’s gauge of stocks across the globe shed 0.78%.

Previously Beijing said it would retaliate if the tariff hike is implements while Trump had insisted China “broke the deal.”

“Investors are worried about the clash of the

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