Global Stocks Edge Higher as U.S.-China Trade Talks Progress
February 18 2019 - 11:55AM
Dow Jones News
By Georgi Kantchev
Global stocks edged higher Monday as renewed hopes for a trade
deal between the U.S. and China helped boost sentiment.
In Europe, the Stoxx Europe 600 index rose 0.2%. That followed a
rally across Asia, with China's Shanghai Composite Index rising
2.7% and Hong Kong's Hang Seng adding 1.6%.
U.S. markets were closed for the Presidents Day holiday. Dow
Jones Industrial Average futures were up 0.1%. The Dow last week
notched its eighth consecutive weekly gain, the longest winning
streak since November 2017.
Trade tensions between the world's two biggest economies have
swayed stocks in recent months as concerns have grown that the
tariff spat could add to an already slowing global growth
picture.
Officials from both countries are holding further talks this
week in Washington after discussions in Beijing. President Trump
tweeted on Sunday that "big progress being made on soooo many
different fronts!"
"The market has been worried about the China tariffs but Trump
wants a deal and a lot of the fears are generally overblown," said
Patrick Spencer, vice chairman for equities at Baird.
Other analysts were more cautious, given that there is still a
substantial gap between the concessions China is willing to offer
and what the Trump administration will accept. Sharp divisions
remain on items such as how Beijing can address U.S. complaints
that China pressures U.S. companies to share technology.
"We don't think tariffs go higher on March 2, but major issues
remain unresolved," Andrew Sheets, chief cross-asset strategist at
Morgan Stanley, wrote in a note to clients.
Investors were also looking ahead to a busy week of central bank
messaging, with minutes from recent Federal Reserve and the
European Central Bank meetings due to be released. Dovish signals
from the Fed and the ECB in recent weeks have helped stocks bounce
off a slump late last year.
"The more patient terminology from the Fed has been fairly
accommodative for markets so far," Mr. Spencer said.
The Fed will release the minutes from its Jan. 29-30 policy
meeting on Wednesday and the ECB will publish its January meeting
minutes on Thursday.
The memos "will be scrutinized for clues about the depth of the
shifts in their respective outlooks," analysts at Société Générale
wrote in a note to clients.
In currencies, the WSJ Dollar Index, which tracks the dollar
against a basket of 16 currencies, was down 0.1%.
In the U.K., the pound edged up as a group of British lawmakers
quit Britain's main opposition Labour Party, a step illustrating
how Brexit has exposed rifts in the British political system. The
group all favor the U.K.'s membership of the EU, though their move
is seen as unlikely to alter the Brexit prospects.
Sterling was up 0.3% against the dollar.
In Asia, Japan's Nikkei finished up 1.8% while South Korea's
Kospi index rose 0.7%.
In commodities, Brent crude, the global oil benchmark, was up
0.2%, while gold prices rose 0.6%.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
(END) Dow Jones Newswires
February 18, 2019 12:40 ET (17:40 GMT)
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