Jonathan Ernst/Reuters
- Global equities paused for thought Thursday, after a lack of fresh positivity around the US-China trade war weighed on markets.
- The first three days of the week saw strong gains for stocks around the world, but sentiment was more muted Thursday.
- Investors are concerned that a deal may not be reached if the US doesn’t amend its plans to keep tariffs on China, a move designed to ensure Beijing complies with any agreement signed between the two countries.
- More worrying data out of Germany dampened sentiment in Europe, while US futures are pointing down.
Stock markets paused for thought Thursday as investors mulled a lack of fresh impetus in the ongoing US-China trade talks.
The first three days of the week saw strong gains for stocks around the world, but sentiment was more muted Thursday, as investors await more concrete news from the talks.
There have been suggestions that the US will keep punitive tariffs on China to ensure it keeps up its side of any potential agreement, according to the Wall Street Journal. Trump previously described himself as "Tariff Man" with traders wary of the president’s trade threats.
White House economic advisor Larry Kudlow told reporters Wednesday that "we’re not there and we hope this week to get closer," reported Bloomberg.
It comes amid reports that the US could give China until 2025 to meet its obligations surrounding agreed commodity purchases, such as soybeans, and the ability of American firms to wholly own businesses in the country, according to Bloomberg.
"Arguably China-US trade dispute is the strongest headwind for the markets to tack, so this trade agreement should continue to provide a substantial boost to investor sentiment ‘if’ both sides can agree on the final pieces of this intricate puzzle," according to Stephen Innes, head of trading and market strategy at SPI Asset Management.
China’s benchmark index, the Shanghai Composite closed up 0.9%, while Japan’s Nikkei was flat.
Europe was in the red Thursday with weak German industrial data continuing to hurt sentiment on the continent after factory orders plunged. The DAX is down 0.15% while the FTSE100 is down 0.6% as of 9.55 a.m in London (4.55 a.m ET).
US futures are pointing down with the Nasdaq and S&P 500 trading lower while the Dow is up slightly. Investors will be hoping the S&P 500 can continue to gain Thursday after five straight positive days, its best streak for two months.
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See Also:
- Stocks are rallying on hopes that China and the US will finally hit a breakthrough and end the trade war
- Global stocks bounce as China manufacturing data smashes expectations
- Global bond yields zigzag as recession fears continue to haunt markets
Source: Business Insider – cburroughs@businessinsider.com (Callum Burroughs)