The Dow Jone snapped a three-day losing streak as investors gorged on bittersweet trade war boasts from Donald Trump and Xi Jinping.
The Dow recovered from yesterday’s losses on Friday, as investors gorged on the tastier morsels from a spate of bittersweet trade war headlines.
With the clock ticking on a new round of tariff hikes, enough rumors are swirling to satisfy bullish and bearish appetites alike.
The US stock market ticked higher on Friday. The Dow Jones Industrial Average snapped its three-day losing streak, rising 41.63 points or 0.15% to 27,807.92.
The S&P 500 nudged 4.7 points or 0.15% higher to 3,108.44, and the Nasdaq climbed 16.11 points or 0.19% to 8,522.32.
The gold price also recovered; the yellow metal bounced 0.37% to $1,469, despite the risk-on move in stocks. The bitcoin price was not so lucky, and the leading cryptocurrency careened below $7,000 to extend its brutal plunge.
The Dow and its peers cautiously advanced amid a deluge of dizzying trade war headlines that mostly confirmed whatever preconceived notions investors already harbored.
Donald Trump and Xi Jinping both weighed in on the state of US-China relations, but neither man said anything that fundamentally altered the trade war forecast.
On Friday, President Trump told “Fox and Friends” that the US was “very close” to reaching a trade deal with China. That should be wildly bullish for stocks, except that he’s made the same claim multiple times since Oct. 11 – when he said that the two countries had already agreed to the outlines of a deal.
Considering that Trump administration officials have been referring to the trade deal as “90% complete” for five months, investors may be growing wary of bold White House predictions.
Chinese President Xi Jinping was more measured in his assessment of the trade war. Speaking at the Bloomberg New Economy Forum on Friday, Xi said that China never wanted to wage a trade war with the US. However, he also said that China would fight to defend its interests.
“We want to work for a phase one agreement on the basis of mutual respect and equality,” Xi said. “When necessary we will fight back, but we have been working actively to try not to have a trade war. We did not initiate this trade war and this is not something we want.”
Both countries have repeatedly expressed their desire to fast-track a trade agreement. However, they have been unable to compromise on longstanding sticking points that have repeatedly foiled proposed agreements – even ones that sought to narrow the focus to issues on which Washington and Beijing were more or less on the same page.
Consequently, the US Chamber of Commerce has warned that even if the US and China finally put ink to paper on a phase one trade deal, it’s unlikely to happen until after a new round of tariffs kicks in on Dec. 15.
Myron Brilliant, executive vice president and head of international affairs at the US Chamber of Commerce, told CNBC:
We’re going to have just a few weeks now and I’m not sure we’re going to get a deal done by Dec. 15.
Brilliant added that the US business community desperately wants Washington and Beijing to unwind their tariff tit-for-tat. However, investors need to temper their expectations for tariff rollbacks.
“China very much wants to see a rollback on the tariffs. By the way, so does the American business community,” he said. “But we’re not going to see an elimination of all the tariffs after phase one.”
This article was edited by Sam Bourgi.
Last modified: November 22, 2019 2:44 PM UTC