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BUSINESS Tuesday 4 december 2018
A25

US-China trade truce seen boosting US stock market

By MARCY GORDON
Associated Press
WASHINGTON (AP) — The
truce in the trade dispute
between the U.S. and Chi-
na should boost rattled fi-
nancial markets, at least
through the year's end, ex-
perts say. But the stock mar-
ket's recent wild gyrations
likely will persist as the two
countries strain to reach a
permanent accord.
"The all-clear sign hasn't
flashed yet but it's certainly
positive news," says Mike
Loewengart, vice president
of investment strategy at E-
Trade.
The U.S. was set to raise
tariffs on $200 billion in Chi-
nese goods on Jan. 1. Presi-
dent Donald Trump agreed
Saturday in a meeting in
Buenos Aires with Chinese
Leader Xi Jinping at the
G-20 summit to hold off for
90 days while the two sides
try to settle their differenc-
es.
That looming deadline, as
well as Trump's threat to
impose tariffs on an addi-
tional $267 billion of goods
from China, possibly includ-
ing iPhones and laptops,
had contributed to sharp In this Thursday, Nov. 29, 2018, photo, specialist John O'Hara, left, works with traders at his post on the floor of the New York Stock
declines in stocks since ear- Exchange.
ly October. Associated Press
The agreement buys time
for the two countries to try October, stocks steadied in hand, some analysts ex- ging concerns that higher going away.
to work out their differenc- in early November. The pect it could post a gain for interest rates could crimp That means even with the
es in a fight over China's selling picked up again as the year in the mid-single economic growth in the encouraging results of the
aggressive drive to acquire investors abandoned high- digits. U.S. and globally. Poten- Group of 20 summit, "There
advanced technologies. flying technology stocks The euphoria could stretch tial hot spots and instability will still be a cloud hanging
In the short term, at least, amid concerns over the into early next year. But if abroad that can fuel high- over the market," E-Trade's
strong market gains could U.S.-China trade tussle and the 90-day deadline nears er commodity prices and Loewengart said.q
be in the offing. slowing global economic without a formal trade spark inflation also aren't
"I think the market will prob- growth and bailed on en- pact, Trump could tweet
ably respond quite favor- ergy stocks as the price of his displeasure and issue
ably," Sam Stovall, chief oil plummeted. threats, creating more mar-
investment strategist for The market also feared the ket choppiness, analysts
CFRA, said in reference to Federal Reserve's policy of say.
the temporary trade ac- gradual interest rates hikes "You're going to see a ton of
cord. "I do think that a could end the longest bull volatility," suggested Nate
Santa Claus rally is in the market in history by slowing Thooft, a senior portfolio
making."Markets opened economic growth and de- manager at Manulife Asset
the week in Asia with solid pressing company profits. Management. "There's defi-
gains after the Trump-Xi But last week Fed Chair- nitely no shortage of uncer-
meeting. In early trad- man Jerome Powell indi- tainty."
ing Monday the Shanghai cated the central bank Volatility has been a hall-
Composite index jumped might consider a pause in mark of the market recent-
2.7 percent and the Hang rate hikes next year while ly. According to S&P Dow
Seng in Hong Kong added it gauges the impact of its Jones Indices, the S&P 500
2.8 percent. Japan's Nik- credit tightening. closed with a gain or loss
kei 225 index climbed 1.4 Stocks soared last week, of 1 percent or more on 18
percent. The Dow and S&P with the S&P 500 rising near- of 44 trading days in Octo-
futures contracts were 1.9 ly 5 percent for the week. ber and November. There
percent and 1.8 percent The closely watched index were eight such days in all
higher, auguring a strong is now up 3.2 for the year of 2017.
start on Wall Street. and, with the U.S.-China Beyond the trade and tar-
After a steep decline in tentative agreement now iff issues, there are still nag-