CONTRIBUTOR – 07.11.2019
(RTTNews) – Stocks have shown a strong move to the upside in morning trading, as buying interest has re-emerged following two lackluster sessions. The major averages have climbed firmly into positive territory after closing mixed for two straight days.
Currently, the major averages are hovering near their new record intraday highs. The Dow is up 217.68 points or 0.8 percent at 27,710.24, the Nasdaq is up 58.56 points or 0.7 percent at 8,469.19 and the S&P 500 is up 16.92 points or 0.6 percent at 3,093.70.
The resumption of the recent upward trend comes after a spokesman for the Chinese Commerce Ministry said the U.S. and China have agreed to lift existing tariffs in phases.
“The trade war started with tariffs and should end with the cancellation of tariffs,” said ministry spokesman Gao Feng, who noted phase one of a trade deal must include both countries simultaneously canceling tariffs on each other’s goods.
The U.S. has widely been expected to scrap tariffs on about $156 billion worth of Chinese imports currently set to take effect on December 15th as part of phase one.
“Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations,” Gao added without providing a timetable.
The latest news has helped offset the negative sentiment generated by yesterday’s report from Reuters indicating a meeting between President Donald Trump and Chinese President Xi Jinping could be delayed until December.
A senior Trump administration official told Reuters discussions continue over terms of phase one of the trade deal and a venue for a meeting between Trump and Xi.
Sites in Europe and Asia have been suggested for the meeting, with Sweden and Switzerland among the possibilities, while Trump’s suggestion of Iowa appears to have been ruled out, the official said.
The official said China’s latest push for more tariff rollbacks was not expected to derail progress toward an interim deal but noted that it was still possible an agreement would not be reached.
In U.S. economic news, the Labor Department released a report showing a bigger than expected decrease in first-time claims for U.S. unemployment benefits in the week ended November 2nd.
The report said initial jobless claims slid to 211,000, a decrease of 8,000 from the previous week’s revised level of 219,000.
Economists had expected jobless claims to dip to 215,000 from the 218,000 originally reported for the previous week.
Oil service stocks have shown a strong move to the upside after turning in some of the market’s worst performances in the previous session, with the Philadelphia Oil Service Index surging up by 2.6 percent.
The rebound by oil service stocks comes as the price of crude oil for December delivery is climbing $0.85 to $57.20 a barrel after sliding $0.88 to $56.35 a barrel on Wednesday.
Significant strength has also emerged among networking stocks, as reflected by the 2.1 percent jump by the NYSE Arca Networking Index.
Semiconductor, telecom, and steel stocks are also seeing considerable strength, while gold stocks are bucking the uptrend amid a pullback by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index crept up by 0.1 percent, while Hong Kong’s Hang Seng Index rose by 0.6 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index has climbed by 0.8 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are up by 0.3 percent and 0.2 percent, respectively.
In the bond market, treasuries have moved back to the downside following the rebound seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 8.9 basis points at 1.903 percent.
Source: RTT News