Well, that didn’t take long. Just days after a Trump cabinet official assured markets that a November trade deal was still on the table, reports have emerged that the agreement may be delayed until at least December. The Dow and broader stock market traded lower on the news.
The Dow Jones Industrial Average looked poised to secure a fourth straight increase, but that daily winning streak now appears in doubt.
Shortly after 11:40 am ET, the Dow tumbled nearly 100 points within a matter of minutes before recouping some of those losses. At last check, the DJIA had declined 33.72 points or 0.12% to 27,458.91.
The S&P 500 and Nasdaq suffered similar setbacks, putting them on track to record losses of 0.13% and 0.47%, respectively.
The gold price tracked inversely with the dip in equities, rising more than 0.6%.
The sudden lurch lower appeared directly correlated with a Reuters report that the “phase one” trade deal could be delayed until December – and that there’s an outside chance it might never arrive at all.
Citing an anonymous official, the publication said that Washington and Beijing are struggling to agree on both the terms of the trade agreement and the venue for the signing ceremony.
As CCN.com reported, the scope of the partial trade deal appeared to have expanded in recent weeks to include thornier issues such as tariff rollbacks and intellectual property protections. While a tantalizing prospect for Dow Jones bulls, that expansion also introduced more risks into the negotiations – risks that may already be making their presence felt.
Any further delay could thrust the trade war into its third calendar year without any tangible progress.
The anonymous source’s evaluation of the state of US-China relations contrasts with public statements out of the White House. Just three days ago, US Secretary of Commerce Wilbur Ross told the Financial Times that Trump and Xi would likely meet at a signing ceremony at some point in November.
Last modified: September 23, 2020 1:15 PM