3 min read.Updated: 25 Feb 2019, 11:59 PM ISTEddie van der Walt, Bloomberg
The S&P 500 rose 0.4%, while the Nasdaq added 0.5% and the Dow Jones gained 0.5%
Donald Trump said he would delay a hike in tariffs on Chinese imports
London: US equities climbed to almost four-month highs, tracking gains in Europe and Asia, after President Donald Trump postponed the date for boosting tariffs on Chinese imports, taken as a sign of progress in the trade talks. Bonds yields rose and oil retreated.
The S&P 500 and Dow Jones Industrial Average touched the highest levels since early November, before paring gains. The trade headlines boosted carmakers in Europe, fueling an advance in the Stoxx Europe 600 Index. Treasuries and core European bonds slipped, while Italy’s securities advanced. General Electric shares soared after the company agreed to sell its bio-pharma business for a total consideration of $21.4 billion.
In Asia, the Shanghai Stock Exchange Composite Index rallied the most since 2015 and the yuan strengthened after Trump said he will delay the March 1 trade deadline, and as comments from China President Xi Jinping suggested top officials will focus on growth rather than cracking down on leverage. Emerging-market currencies and shares advanced despite China’s state-run Xinhua news agency later publishing a commentary saying talks will be harder at the final stage.
“The reality is there was enough pain created that caused both the Trump administration and President Xi and his administration basically to say, ‘we have to come to an agreement,"’ said Nathan Thooft, Manulife Asset Management’s head of global asset allocation. “There’s no doubt the interaction and the fact that they’re actually speaking and seem to be progressing is being viewed as a positive in the market."
The official delay from the US may give fresh impetus to extend a global rally in equities that was being tested amid an uncertain future on global trade and forecasts for global economic growth to ebb. Also in focus this week will be a hearing from Federal Reserve Chairman Jerome Powell, where investors will get the latest read on monetary policy.
Trump said the trade talks were productive. “The US has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues," he said in a Twitter posting on Sunday evening.
Elsewhere, crude oil fell after Trump said in a tweet that prices were too high, while copper held on to gains over Chinese optimism. Gold was little changed, with Newmont Mining climbing on a hostile bid from rival Barrick Gold. The pound was little changed versus the euro as UK Prime Minister Theresa May pushed back the deadline for Parliament to vote on her Brexit deal.
The S&P 500 Index rose 0.4% as of 12:55 p.m. New York time, while the Nasdaq Composite Index added 0.5% and the Dow Jones Industrial Average gained 0.5%. The Stoxx Europe 600 rose 0.3%, reaching the highest level in almost 20 weeks. The MSCI Emerging Market Index rose 0.9%, the sixth straight increase. The MSCI Asia Pacific Index gained 0.7%, hitting the highest in more than 20 weeks with its sixth straight advance.
The Bloomberg Dollar Spot Index rose less than 0.1 percent, after reaching the lowest level in almost three weeks. The euro gained 0.1 percent to $1.1346. The British pound strengthened 0.3 percent to $1.3087. The MSCI Emerging Markets Currency Index rose 0.4 percent, touching the highest in more than three weeks.
The yield on 10-year Treasuries climbed three basis points to 2.68 percent. Germany’s 10-year yield rose one basis point to 0.11 percent. Britain’s 10-year yield increased two basis points to 1.18 percent.
West Texas Intermediate fell 3.7 percent to $55.16 a barrel, the first drop in nine sessions. Gold dropped 0.1 percent to $1,326 an ounce. The Bloomberg Commodity Index declined 1.1 percent, the first retreat in more than a week.