Wall Street bounced back on Wednesday with full enthusiasm as investors got to see a positive ray of hope from Donald Trump’s statement that discussion with China on an interim trade pact was going “very well.” President Trump, while speaking to German Chancellor Angela Merkel on Wednesday at a meeting in London, said that negotiations with China were on the right track and that “We will make a lot of progress.”
The three key US stock indexes jumped up; stocks led the surging market from the financial, healthcare, and tariff-sensitive technology sector.
The indexes witnessed a huge fall in the price of most of the stocks last week on the clue of a standoff in the negotiations between the US and China. There were fears that this deadlock might lead to the imposition of new tariffs with effect from December 15, dampening the spirits of the market players in the past few days.
According to a senior portfolio manager at Voya Investment Management in New York, Doug Cote, “Anything that happens on any day is because of trade, but it’s a much richer mosaic underneath,” Cote said. “The consumer’s on fire. That’s what’s behind the resilience in the market and this will be the best holiday season on record. Everyone sees this trade battle as World War Three, and it’s not.”
The sources familiar with the discussion on the trade deal between the US and China say that both the economic superpowers are inching closer to mutually, assenting on the amount of tariffs that would be withdrawn in the first phase of the trade pact. What is commendable is that the pact is taking off despite strains due to the prevailing situation in Hong Kong and Xinjiang.
Issues that still remain unresolved are the method to make sure that China has to purchase US agricultural goods and the exact amount of tariffs that should be rolled back.