Stocks jump on fresh hopes for partial trade deal

Los Angeles Times Finance 2 months ago

Stocks rose in the U.S. and Europe as China revived hopes of progress in trade talks with the Trump administration this week despite potential headwinds. Treasuries slipped.

Chipmakers led the S&P 500 Index higher after Bloomberg reported that China is still open to a partial trade deal with the U.S. The Stoxx Europe 600 Index advanced for the third day in four. The dollar weakened after two days of gains, and 10-year Treasury yields climbed to about 1.55%.

High-level U.S.-China trade talks are set to resume in Washington on Thursday after what seemed to be escalating tensions to start the week. While a broad agreement seems unlikely, China signaled it’s open to a limited deal, provided no more tariffs are imposed, according to an official. In return, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points, the official said, without offering further details.

Investors are also looking to gauge the next moves by major central banks. Chairman Jerome Powell said Tuesday that the Federal Reserve will resume purchases of Treasury securities to avoid a repeat of recent turmoil in money markets, while hinting at the possibility of another rate cut. Minutes of the Fed’s most recent rates meeting will be released Wednesday, providing further insight into policy makers’ thinking ahead of their next meeting at the end of the month.

Elsewhere, benchmark equity gauges fell across Asia, except for those in Shanghai and Mumbai. Bond yields dropped in Greece after the region’s most-indebted country sold bills at negative yields. Gold held above $1,500 an ounce.

The yuan climbed offshore and headed to its biggest gain in almost a month, helped by trade optimism and a stronger-than-expected daily fixing. West Texas crude touched $53 a barrel.

Here are some key events coming up this week:

  • On Wednesday, minutes will be released from the last policy meeting of the Fed’s rate-setting committee. The account of the European Central Bank’s last gathering is due Thursday.
  • Chinese President Xi Jinping is scheduled to meet Indian Prime Minister Narendra Modi on Friday and Saturday for an informal summit.
  • The U.S. releases a key measure of inflation on Thursday.

Here are the main moves in markets:

Stocks

  • The S&P 500 Index rose 0.7% as of 6:50 a.m. Pacific.
  • The Stoxx Europe 600 Index gained 0.5%.
  • The MSCI Emerging Market Index dipped 0.1%.

Currencies

  • The Bloomberg Dollar Spot Index declined 0.1%.
  • The euro rose 0.2% to $1.098.
  • The British pound rose 0.1% to $1.2231.
  • The Japanese yen depreciated 0.3% to 107.38 per dollar.

Bonds

  • The yield on 10-year Treasuries added three basis points to 1.56%.
  • Britain’s 10-year yield climbed four basis points to 0.45%.
  • Germany’s 10-year yield rose three basis points to -0.57%.

Commodities

  • West Texas Intermediate crude climbed 1.4% to $53.36 a barrel.
  • Gold rose 0.1% to $1,506.79 an ounce.

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