Market Outlook: Political Christmas presents
The world's stock markets surged in response to the announcement that the United States and China have reached a new Phase 1 trade agreement. China has promised to buy more American products. The US will halve its September tariffs on certain Chinese goods from 15 to 7.5% and has suspended further tariffs scheduled for December 15, but it will keep in place the 25% tariffs on about half of Chinese imports that were imposed earlier.
Market Outlook: Record share prices until year-end?
Over the past week, financial markets have been supported by super-strong job data, which have lifted stock exchanges in the United States. America's broad S&P 500 equity index has now gained around 27% so far this year, while the MSCI World equity index has risen around 20% (both in US dollars).
Market Outlook: Trump reloads his trade weapon
Stock markets have remained largely unchanged or have lost ground this past week, which is not so strange after several weeks of upturns and new record highs. The recent market rally was partly based on hopes that trade conflicts were moving towards resolution, but it was also based on better-than-expected macroeconomic data in the United States that actually began in September – judging from Bloomberg's "surprise index" (which shows to what extent economic outcomes meet expectations). This week stock markets have thus cooled down because of weaker purchasing managers' indices than anticipated and new American tariff threats.
Market Outlook:Soft landing will support share prices
The twists and turns of the trade dispute continue to be the focus of market attention. Although recent signals have been predominantly upbeat, this picture is disrupted by apparent difficulties in assembling all the pieces of the puzzle. Also complicating things is that the pro-democracy protests in Hong Kong are being drawn into trade issues. US and Chinese statements are keeping the market's faith in a Phase 1 trade agreement alive. Worth noting is President Donald Trump's aversion (to date) towards signing Congress's Hong Kong bill, which declares that the United States supports the demonstrators.