Markets surge on trade war optimism; Trump urges Opec to 'relax' - business liveShares surge in Asia and on Wall Street after president Trump delays a planned hike in Chinese import tariffsLatest: US president says world doesn’t need higher oil pricesIntroduction: Trump delays new tariffs on Chinese goodsTariffs were due to rise to 25% on March 1China’s CSI300 has best day since 2015 4.53pm GMT And finally (I think), European stock markets have closed higher.Italy’s FTSE MIB led the way, gaining almost 0.9% amid relief that Fitch has left its credit rating unchanged.European Closing Prices:#FTSE 7183.74 +0.07%#DAX 11505.39 +0.42%#CAC 5231.85 +0.31%#MIB 20436.96 +0.86%#IBEX 9204.3 0.00%Persimmon shares are in the red after it was reported over the weekend that it might be stripped of its ‘help to buy’ status. The home builder has benefited greatly from the government scheme which assists first-time buyers get onto the property ladder. Persimmon has been subject to complaints in relation to property standards and the government is reviewing which companies will be allowed participate in the scheme after 2021, and investors are worried Persimmon might be excluded. The stock gapped lower this morning, and while it holds below the 200-day moving average at 2,370p, its outlook should remain negative. Associated British Foods confirmed that Primark’s first-half like-for-like sales dropped by 2%, and analysts were expecting a 1.6% decline. Total revenue increased by 4% for the period, but traders were expecting 4.8% growth. The firm performed well in Spain, France and Italy, but underperformed in Germany. Total UK Primark sales ticked up 2% and the US operation performed ‘strongly’, and full-year guidance remains unchanged. The stock has been in decline since November, and a break below 2,200p might bring the 2,000p region into play. 4.45pm GMT Neil Wilson of Markets.com also senses the US stock market is reaching a crunch moment....but will the rally subside, or crack on?Dow $DJIA - kinda feels like an important moment coming up for some reason... pic.twitter.com/VqrZrHGEGY 4.31pm GMT One upbeat tweet does not a trade deal make.While Donald Trump insisted that “substantial progress” has been made with China, we still don’t know what - if any - concessions Beijing has made.Among the biggest unanswered questions is the extent to which China has offered any meaningful concessions on some of its core economic policies that US negotiators have been seeking to reverse. On Sunday, Mr Trump justified his decision to keep negotiations alive and not proceed with higher tariffs by citing “substantial progress” on structural issues such as China’s pervasive use of industrial subsidies or the protection of American intellectual property from theft or forced transfer. Yet there is scant evidence that Beijing has offered to make a big change in course, or to provide a mechanism to assure Washington that it will stick by any commitments.“I don’t think any agreement will resolve the underlying problem,” said Wang Wen, executive dean of the Chongyang Institute, a think-tank under Renmin University. “The difference is very great and so we can only approach it bit by bit. This time we can only sketch the broad outlines. 4.15pm GMT Stocks are sneaking a little higher on Wall Street now, putting the Dow Jones industrial average 200 points higher at 26,233 points (up 0.8% today).The tech-focused Nasdaq is up 1%, on hopes that technology companies will be spared higher tariffs on Chinese-made components. 4.00pm GMT Donald Trump has returned to one of his favourite hobbies - tweeting about the stock market:Since my election as President the Dow Jones is up 43% and the NASDAQ Composite almost 50%. Great news for your 401(k)s as they continue to grow. We are bringing back America faster than anyone thought possible! 3.31pm GMT GE (now up 11%) and Danaher (+7.4%) are leading the Wall Street risers, thanks to their bioscience deal.They’re followed by hard drive maker Western Digital (+4.8%) and chipmaker AMD (+4%), with retailer Macy’s and tiremaker Goodyear (both +3.1%) close behind.Should the talks conclude positively it will likely be received positively by global markets particularly those sectors and companies that are reliant on global trade; from Boeing and Apple in the US, global shipping companies, to semiconductor manufacturers in China. The Chinese market will likely see the most positive reaction as there are signs the domestic economy is slowing down and this uncertainty disappearing will likely be a welcome stimulant. Both sides reacted positively to the latest rounds of talks but did comment that bilateral trade deals are “complicated and arduous.” With the 2020 elections in the US approaching, President Trump will have the added impetus of wanting to show the American electorate that he has delivered on trade policy. 2.53pm GMT The US stock market has nearly recovered all last autumn’s losses, thanks to its rally this year.Market analyst David Jones suggests this could lead to volatility -- will traders be tempted to cash profits, or will they decide the worst is over and pile into equities?Another positive start to US markets - fresh highs for 2019. US indices are now very near to levels where sentiment turned in October/November/December and the selling came back. It could be an interesting couple of weeks. pic.twitter.com/32DDFbpwGH 2.45pm GMT Industrial groups and tech firms are leading the rally in New York, as trade war optimism ripples across Wall Street.Shares in GE have surged by 13% after it agreed to sell its biopharmaceutical business to rival conglomerate Danaher in a $21.4bn all-cash deal. 2.41pm GMT Ding Ding! The New York stock market has hit a fresh three and a half-month high at the start of trading.U.S. stocks open higher
https://t.co/2Jnib7s25M pic.twitter.com/qlROo8tJMQThere is also talk of a summit at some point between the US and China, at which an agreement over trade can be reached. The US-China trade dispute has been a drag on the global economy and world trade for over a year and Asian export growth has slumped. Now a key negative for both the global economy and global markets looks as though it is being removed. In addition, geopolitical risk is mitigated by the Trump-Kim Summit in Hanoi on Wednesday.A US-China trade agreement might trigger a recovery in demand and investment as a key uncertainty is removed. 2.26pm GMT Cambridge University economist Helen Thompson points out that the oil price is already lower than during previous Trump attacks on Opec - a sign that the global economy has slowed.One way to judge economic prospects may be becoming the WTI oil price that induces Trump to tweet at OPEC: April 2018, 67; June 2018, 74; September 2018, 73; November 2018 60; February 2019, 57. 1.33pm GMT US crude oil has fallen sharply since Donald Trump urged OPEC to relax - and stop cutting production.A barrel of New York light crude is now changing hands at $55.96 per barrel, down 2.5% from $57.53 earlier today. Traders are calculating that White House will encourage the oil cartel to keep the pumps open.“We might see a less aggressive stance on supply cuts from the Saudis -- this might stop them from cutting deeper,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.“But I still think Saudi Arabia has the incentive to see higher oil prices, and deliver the cuts agreed in December,” when OPEC and its partners agreed to remove 1.2 million barrels a day.Oil drops after Trump attacks OPEC again
https://t.co/J44M8BlYhA pic.twitter.com/vxrBgOAbu4 1.19pm GMT Today’s tweet is the eighth time that @realdonaldtrump has challenged Opec to take action to lower the oil price, points out analyst John Kemp:U.S. PRESIDENT TRUMP is taking an increasingly tough line on oil prices with Saudi Arabia, with the president's twitter interventions occurring at lower prices. The president now calling on Saudi Arabia to keep oil prices down when they are in the $60s rather than $70s or $80s: pic.twitter.com/P5HOObIXoW 1.02pm GMT Warren Buffett has also brushed aside the idea that wealthy people would flee America if they faced a higher tax burden.In a refreshing blast of realism, Buffett tells CNBC that most rich people, if they were sane, would rather be taxed half of their wealth and stay in the US rather than leave and keep the lot.The wealthy are under-taxed relative to the rest of the population."I would say the wealthy are definitely under-taxed relative to the general population," Warren Buffett says, but that the United States is still "the land of opportunity."
https://t.co/TOp2bWk4zo pic.twitter.com/E9zfHI5qmi 12.50pm GMT Veteran investor Warren Buffett has welcomed Donald Trump’s decision to to extend negotiations with China, rather than impose higher tariffs on half its exports to the US.Speaking on CNBC, Buffett said he was “relieved” there is a chance that a deeper trade war can be avoided, saying it would be “bad for China, and bad for us”.Negotiations are tough, this is a big deal to both countries, and to some extent you’re playing a game of Yield curve option-pricing modelsen...."I'm relieved at the idea that there's still some chance that sense will prevail" Warren Buffett says of U.S.-China trade negotiations. "The best thing for both China and the United States is to work out something sensible." pic.twitter.com/Id2GoSSCGO 12.11pm GMT Donald Trump is awake, and tweeting that Opec should chill out.Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike - fragile!Oil traders react to Trump tweet #OOTT #relax pic.twitter.com/UmUyUff44e 11.55am GMT The cost of the UK phone hacking scandal continues to climb.Reach, the publisher of the Mirror, Express and Star newspapers, has set aside another £5m to cover “historical legal issues”. That takes its total provision to £75.5m. “This reflects the more challenging than expected trading environment for advertising revenue generated locally and the short term uncertainty arising from the UK’s exit from the European Union.” 11.32am GMT In other news, UK property magnate Hammerson is in talks to sell off more than £900m of property after being hit by the crisis in Britain’s retail sector.Hammerson, which owns shopping centres including Birmingham’s Bullring and London’s Brent Cross, has been burned by the wave of store closures and company collapses.Among Hammerson’s tenants are Patisserie Valerie, which went into administration last month but was saved from closure by a management buyout backed by an Irish private equity firm, as well as House of Fraser and New Look.Both resorted to company voluntary arrangement to avoid insolvency, which forced the firms to close a string of stores and seek rent cuts from their landlords. Related: Bullring owner targets £900m-plus sell-off as retail crisis bites 11.11am GMT Back in Beijing, government officials have said a US-China trade deal is getting closer....Reuters has the details:The Chinese government’s top diplomat, State Councillor Wang Yi, told a forum in Beijing on Monday that the talks had made “substantive progress”, providing positive expectations for the stability of bilateral ties and global economic development, China’s Foreign Ministry said. China’s official Xinhua news agency said in a commentary that the goal of an agreement was getting “closer and closer”, but also warned that negotiations would get more difficult as they approached the final stages. 10.47am GMT The post-Brexit derivatives deal hammered out by the US and the UK should be welcomed by the City - here’s the latest reaction:A no-deal Brexit is now unlikely to blow up the derivatives markets after a deal struck by US and UK regulators"London is, and will remain, a global centre for derivatives trading and clearing," said Christopher Giancarlo, chair of the US CFTC
https://t.co/2xFbgdQ759Britain and U.S. seek to allay fears of disruption in the multitrillion-dollar derivatives market in the event of a no-deal Brexit
https://t.co/OHzCrOr9aF via @sabrush #tictocnews pic.twitter.com/YwBt8gIFqwUK and US regulators build Brexit 'bridge' for derivatives
https://t.co/cgiMn2xlSz 10.22am GMT Just in: The UK and the US have reached an agreement to ensure that derivatives trading can continue between the two countries after Brexit.The deal means that City banks and clearing houses will be free to provide services to US clients as they do today, under existing EU rules. This continuity could protect a massively important part of London’s financial sector, as it braces for Brexit disruption.What happens in global derivatives markets has a material impact for the man or the woman on the Clapham Omnibus, the Santa Monica freeway or the Tokyo subway. 10.07am GMT Share in European carmakers have jumped by over 1.5% this morning, to their highest level since last November.Many EU auto firms have factories in China and/or the US, so would have suffered from increased tariffs on imports between the two countries. 9.58am GMT Here’s our news story on Karren Brady’s departure from Taveta: Related: Karren Brady quits as chair of Philip Green’s retail group 9.28am GMT Newsflash: Baroness Karren Brady has resigned as chair of the company behind Sir Philip Green’s retail empire, Taveta Investments.“Taveta would like to announce that Karren Brady and Sharon Brown (in their respective capacities as non-executive chairman and non-executive director) have resigned from its board. Taveta thanks them for their contribution and wishes them well for the future.Taveta is in active discussions with individuals who have significant relevant experience and expects to make a further announcement as to the composition of its board shortly. 9.19am GMT With just 32 days to go until Brexit Day, UK businesses are becoming increasingly - and understandably - anxious.The finance director of Associated British Foods has warned that it’s “unbelievable” that a no-deal Brexit is still on the table.“For it even to be contemplated - a hard Brexit where you’ve got no arrangement with your major trading partners and when we’re so reliant on them for the food supply chain - I find it unbelievable.“The consequences of getting this wrong for people are major and I want people to understand that. Related: Brexit: May increasingly likely to accept article 50 extension, minister suggests - Politics live 9.07am GMT Britain’s housebuilders are bucking the trend this morning, as they slide to the bottom of the FTSE 100 leaderboard.Since Government’s Help to Buy policy was introduced, Persimmon’s profit per house has gone from £22,114 in 2012 to £60,219 in 2018. Half of the homes they built last year were sold under Help to Buy.#ukhousing #help2buy #persimmonhttps://t.co/9xiuJ6i8aD pic.twitter.com/NqAlv9YH8Q 8.52am GMT Wall Street is expected to hit a new 2019 high when trading resumes in New York in under six hours time.Connor Campbell of SpreadEx says:With the Asian markets surging to a 5 month high in the aftermath of Trump’s comments, the Dow Jones is set to hit its own 26100-plus, 3 and a half-month peak when it opens later this afternoon.Yet the European indices weren’t anywhere near as giddy, perhaps held back by the ongoing lack of clarity over what exactly is going to happen with Brexit. 8.39am GMT China’s stock market has been through a Earnings-price ratio year -- falling steadily in 2018, before surging back in 2019. 8.23am GMT Germany’s DAX index has jumped 0.6% in early trading, as Frankfurt traders welcome the ceasefire in the trade war.Germany’s economy hasn’t grown since last summer, with exports suffering from trade disruption, so its manufacturers will be hoping that Trump and Xi sign off an agreement soon. 8.21am GMT Britain’s FTSE 100 index has jumped by 20 points in early trading to 7198, as the relief rally reaches Europe.Mining group Glencore is the top riser, up 2%. Demand for its iron ore and coal reserves will rise if a trade war is averted. 8.13am GMT Virtually every stock on China’s CSI300 index rose today, with financial stocks and technology companies leading the sizzling rally.Scores of stocks were suspended after jumping more than 10%, which is the largest gain allowed by Chinese regulators. 8.11am GMT Tai Hui of J.P. Morgan Asset Management takes a cautious line, saying:“The latest news may not offer a significant boost to start the week. Nonetheless, it helps to underpin positive investor sentiment.” 8.02am GMT The US-China trade war has been a big culprit behind the recent slowdown in the global economy, so there should be widespread relief that it isn’t about to get any worse.Hussein Sayed, chief market strategist at FXTM, argues that economic and political pressures forced Donald Trump to give China more time to reach a trade deal.The trade dispute has been a painful one for both countries and the world, especially since it occurred when the economic cycle approached a peak. While China wants to prevent a hard landing, President Trump wants to fulfill one of his key campaign promises to correct the trade deficit. However, to support his re-election bid, Trump needs to avoid dragging down the U.S. economy and thus announce a deal, even though it might not look like a perfect one.Equity markets in mainland China were the main beneficiaries of Trump’s announcement on extending the 1 March deadline. The blue-chip CSI 300 Index surged 4% today, hitting its highest level since June 2018; it has entered a bull market, rising more than 23% from January lows. The Chinese Yuan also strengthened 0.4%, reaching a 7-month high. 7.55am GMT Turnover on the Chinese stock exchanges has been huge today, after president Trump removed the threat of raising tariffs at the end of this month.Party like it's 1999: #China stocks’ Trillion-Dollar rally pushes another index toward Bull Market.
https://t.co/ftx2zd1Rz5 pic.twitter.com/CfbG8vmSyR 7.50am GMT The turnaround in the Chinese stock market this year is quite something, even before today’s surge:Booooooming day in Chinese equities, for the Europeans just getting up. The two weeks since Lunar New Year ended have been massive pic.twitter.com/H8KkJXvv4pChinese stocks had their best day in three and a half years after Donald Trump said the US will delay an increase in tariffs on $200bn of goods from Chinahttps://t.co/hXGrquyW3m pic.twitter.com/f3B4QN4tmZ 7.35am GMT Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very..........productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!Nothing has been confirmed and we think it will be impossible for China to conform to US demands on substantive core issues. But that’s for another day.BULL market Chart! #China's Shanghai Composite Index is up 20.16% since the first trading day of this year. pic.twitter.com/sirQuEzs8hChina’s official Xinhua news agency echoed Trump’s comments and said the two sides “came a step closer to realising the important consensus reached” by Trump and Xi Jinping when they agreed to a trade war truce in December. The delegations agreed to “carry out follow-ups in accordance with the instructions of the two heads of state”.The delay in tariffs was the clearest sign yet of a breakthrough the two sides have sought since calling a 90-day truce in a trade war last year. It will likely be cheered by markets as a sign of an end to the year-long dispute that has disrupted commerce worth hundreds of billions of dollars of goods and slowed global economic growth. Related: Donald Trump delays tariff hike on Chinese goods, sending stock markets soaring Related: Donald Trump delays tariff hike on Chinese goods, sending stock markets soaring European Opening Calls:#FTSE 7204 +0.35%#DAX 11534 +0.67%#CAC 5237 +0.41%#MIB 20374 +0.55%#IBEX 9250 +0.50% Continue reading...
Source:
Markets surge on trade war optimism; Trump urges Opec to 'relax' - business live
Topic: Markets surge on trade war optimism; Trump urges Opec to 'relax' - business live (Read 1808 times)
February 17, 2023, 10:59:17 AM