Markets rise on hopes of breakthrough in trade talks with China

Andrew Cummings
January 20, 2019

Reuters reported on January 9 that U.S. officials used three days of trade talks with Chinese counterparts in Beijing to demand more details on China's pledge to make big purchases of American goods.

The dollar index rose 0.31 per cent, with the euro was down 0.26 per cent to $1.1365.

Spot gold was down half a percent at $1,285.03 an ounce, after relinquishing its spot as the most expensive precious metal to palladium early in December.

The administration of U.S. President Donald Trump has imposed import tariffs on Chinese goods to put pressure on Beijing to meet a long list of demands that would rewrite the terms of trade between the two countries.

On the economic front, United States consumer sentiment index fell to 90.7 in January from 98.3 in December amid growing concerns over USA economic growth, said the report released by the University of MI on Friday.

On the economic front, in the week ending January 12, the advance figure for USA initial jobless claims, a rough measure of layoffs, was 213,000, down 3,000 from the previous week's unrevised level, the Department of Labor reported on Thursday.

"Usually these "rumors" aren't necessarily untrue, they just aren't true yet, which generally means there is some progress going on but they just don't want to tell anyone yet", said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

While that was the biggest influence, "we've still got momentum since the first of the year", he said.

"A lot of people have liquidated their positions coming into earnings so that they can react quickly as earnings come out", said Mark Otto, global market commentator at GTS in NY.

"The approach we need is one of prudence, patience and good judgment", Williams in a speech in New Jersey Friday morning, hinting that both future rate hikes and the unwinding of the Fed's balance sheet could be adjusted if conditions warrant.

US manufacturing output last month increased by the most in 10 months, pushed up by a surge in the production of motor vehicles and a range of other goods, the US Federal Reserve said on Friday. The index, which tracks stocks across 47 countries, was set for its fourth straight weekly gain, its longest weekly winning streak in six months. They were all up more than 1 percent for the week entering Friday's session. Major banks, including J.P. Morgan Chase, Bank of America, Morgan Stanley and Goldman Sachs, released their quarterly results this week.

The energy sector, which is the best performing S&P sector so far in 2019, rose 1.66 percent, also boosted by higher oil prices.

One disappointment was Netflix Inc, which fell 1.61 percent as investors looked past its record subscriber numbers and instead focused on its lower-than-expected revenue forecast for the first quarter. Dow member American Express also fell after reporting disappointing earnings.

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