Business Maverick

U.S. Stocks Rise on China Trade Deal Optimism: Markets Wrap

By Bloomberg 12 December 2019

U.S. stocks rose after Bloomberg reported that the Trump administration reached a deal in principle with China on trade. Treasury yields spiked above 1.9%.

The S&P 500 pushed higher as Trump met with trade advisers on a deal that could be announced as soon as today, according to people briefed on the plans. A potential deal would likely avert fresh tariffs due to take hold Sunday.

A breakthrough on trade would remove a major overhang for equity investors just a day after the Federal Reserve signaled it is no rush to raise interest rates as the economy shows steady improvement. Trade headlines had whipsawed stocks all day, as investor optimism rose and fell with the latest negotiation-by-tweet.

Global stocks climb above their January 2018 peak for the first time

Thursday’s gain in American stocks pushed the MSCI All-Country index to its first record since January 2018. The spike in Treasury yields boosted financial stocks, lifting the S&P 500 Financial index past its closing high from May 2007.

In Europe, the central bank said it would maintain bond buying and keep rates low until it gets near its inflation goal. The euro rose and bonds in the region slipped. The Swiss franc nudged higher after the central bank left rates unchanged. The pound fell as U.K. voters went to the polls.

Earlier in the day, equities in Hong Kong and Seoul outperformed, while they slipped in Tokyo, Shanghai and Sydney. The Hong Kong dollar climbed into the stronger half of its trading band against the greenback for the first time since July. In the Middle East, Saudi Aramco shares jumped for a second day, pushing the oil giant’s value beyond the $2 trillion mark.

Elsewhere, oil futures rose. The lira gained as the Turkish central bank delivered another interest-rate cut that exceeded forecasts.

These are the main moves in markets:

Stocks

  • The S&P 500 Index rose 0.7% as of 2:46 p.m. New York time.
  • The Dow Jones Industrial Average jumped 0.8%.
  • The Stoxx Europe 600 Index rose 0.3%.
  • The MSCI All-World Index rose 0.8% to a record.
  • The MSCI Asia Pacific Index rose 0.6%.

Currencies

  • The Bloomberg Dollar Spot Index added 0.1%.
  • The euro fell 0.2% to $1.111.
  • The British pound lost 0.7% to $1.3108.
  • The Japanese yen fell 0.6% to 109.18 per dollar.

Bonds

  • The yield on 10-year Treasuries rose 12 basis points to 1.91%.
  • The two-year Treasury rate added six basis points to 1.67%.
  • Germany’s 10-year yield spiked to -0.26%.

Commodities

  • West Texas Intermediate crude climbed 1% to $59.35 a barrel.
  • Gold futures increased 0.6% to $1,490.83 an ounce.
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