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What trade fears? Wall Street is back in rally mode


Jumat, 06 September 2019 / 06:35 WIB
What trade fears? Wall Street is back in rally mode

Sumber: Reuters | Editor: Wahyu Rahmawati

KONTAN.CO.ID - NEW YORK. U.S. stocks surged on Thursday on expectations of a de-escalation in trade tensions after Washington and Beijing agreed to hold high-level talks next month, while strong U.S. economic data eased fears of a domestic slowdown.

After anxiety about a deepening trade war triggered a sell-off in late July and early August, leading to speculation that a decade-long bull market was ending, the S&P 500 has largely recovered and is now less than 2% short of its July 26 record high close. The benchmark index has climbed 2.4% in the past two sessions.

China and the United States agreed to hold talks in early October in Washington, boosting markets as investors bet on a thaw in the trade war between the world’s two largest economies, which has taken a toll on global growth.

Alternating signs of improvement and deterioration in the U.S.-China trade war, often based on tweets and comments from Trump, have repeatedly sparked volatility on Wall Street in recent months.

“Whether the talks occur or not, we’ll see. And whether they are productive, we’re skeptical. But the market loves it,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Read Also: Recession risks rise for Germany as industrial orders plunge

The S&P information technology index .SPLRCT rose 2.1%, while financials .SPSY jumped 1.9%, the two rising the most among the 11 major S&P 500 sectors.

The interest rate-sensitive S&P 500 Banks Index .SPXBK surged 2.5%, following a rise in U.S. Treasury yields.

The ADP National Employment Report, considered a precursor to the Labor Department’s more comprehensive jobs report, showed U.S. private employers’ payrolls grew at the fastest pace in four months in August, led by big gains in service-sector jobs.

Another private survey showed growth in U.S. services sectors accelerated in August, rebounding from its weakest level in nearly three years, as new orders rose to their highest level since February amid trade worries.

The upbeat reports eased concerns of an economic downturn, which was exacerbated by data on Tuesday that showed a contraction in U.S. factory activity in August. Investors will keep a close watch on the crucial nonfarm payrolls data due on Friday.

Read Also: China, U.S. to hold trade talks in October

“Manufacturing is in a bit of a global slump, but if you look at the other economic data, like the services and jobs reports, none of them point to an economy that is teetering on a recession,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

The Dow Jones Industrial Average jumped 1.41% to end at 26,728.15 points, while the S&P 500 gained 1.30% to 2,975.97.

The Nasdaq Composite surged 1.75% to 8,116.83.




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