After a heavy day of selling on Monday, Dow Jones Industrial Average (DJIA) futures held their nerve this morning. The stock market is cautiously optimistic as Chinese officials confirmed a low-level meeting in Washington this week to hash out trade issues.
China’s English-language newspaper, Global Times, said the talks could breath “fresh air” into negotiations ahead of the larger summit in October.
“Chinese Vice Finance Minister Liao Min is set to lead a delegation to the US on Wednesday… Analysts following the development of the trade war say that Liao heading the delegation could bring fresh air to the trade talks” – Global Times.
Dow futures flat in early trading
Dow Jones Industrial Average (DJIA) traded flat at 4.57 am ET on Tuesday. It comes after a torrid Asian session that saw the Shanghai Shenzhen CSI 300 Index and Hong Kong’s Hang Seng Index fall almost 1 percent.
‘Fresh air’ in the trade war negotiations?
At the invitation of US negotiators, Chinese representatives will touch down in the capital this week. In a plot twist, China has shaken up its negotiating team for this session. Rather than sending delegates from the Commerce department, China will deploy the Vice Finance Minister Liao Min.
Analysts believe this will shift the tone of the discussion towards resolving tariffs rather than butting heads on broader trade and commerce issues.
Editor in chief at the Global Times Hu Xijin said the US shouldn’t expect too much from China and instead they should seek a middle ground.
“It’s hoped the US side can treat China-US trade talks with a realistic attitude. It can’t expect to transform China, but expand mutual benefit of the bilateral trade. It can’t pursue maximum benefit for US side, but relative change. Negotiations can’t be carried out capriciously.”
Saudi Arabia oil attack still weighing on the Dow
Despite the trade war progress, Saturday’s drone strikes in Saudi Arabia still weigh on Dow futures.
Trump said on Monday he is prepared for military action against Iran, but will wait for “definitive proof” of the regime’s involvement in the drone strikes. Speaking to reporters, Trump said:
“As soon as we find out definitively we’ll let you know but it does look [like Iran was behind the attacks]. I don’t want war with anybody but we’re prepared more than anybody.”