NEW YORK (Reuters) – Government debt yields and a gauge of global equity markets rose on Wednesday as sentiment improved after U.S. President Donald Trump said trade talks with China were going “very well” and a news report suggested key differences were being ironed out.
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, December 2, 2019. REUTERS/Staff
European stocks rallied, with the blue-chip Euro STOXX 50 .STOXX50e, Germany’s DAX .GDAXI and French CAC 40 .FCHI gaining more than 1%. The news reversed overnight losses in Asia when investors remained jittery over the prolonged talks.
The dollar slumped against the euro after the Institute for Supply Management (ISM) reported activity in the U.S. services sector slowed more than expected in November amid lingering concerns about trade tensions and worker shortages.
The poor ISM reading failed to derail the rally in equities as the underlying economic data overall is getting better, said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis.
“It’s looking more and more like two things: One, we’ve certainly pushed back heavy fears of recession this year and the next thing is the realization that we might be accelerating again, not only here but globally,” Paulsen said.
Trump, who on Tuesday had roiled markets after he raised the prospect of extended U.S.-Sino trade tensions, told reporters at a meeting of NATO leaders near London that “discussions are going very well and we’ll see what happens.”
Market sentiment rebounded earlier when Bloomberg reported that the two sides were closer to agreeing on how many tariffs would be rolled back in a “phase one” trade deal.
MSCI’s gauge of equity performance in 49 countries .MIWD00000PUS gained 0.55% while stocks on Wall Street also rose, snapping a three-day losing streak.