NEW YORK (Reuters) – Oil prices rose and an indicator of global stock markets reached a new high on Tuesday as investors waited for a China-US. UU. The trade agreement they hope will stimulate global growth after the economy in 2019 saw its weakest year since the financial crisis.
Gold prices fell when the signing planned at the White House on Wednesday of the Phase 1 trade agreement reduced both the attractiveness of the safe haven ingot and the Japanese yen, which fell to a minimum of eight months.
The worldwide index and MSCI shares across the country on Wall Street set highs during the day before the S&P 500 and Nasdaq backed down a bit, as investors said the long-awaited deal was priced in the market. Shares in Canada and Australia also increased to record levels.
The actions on Wall Street fell after Bloomberg reported that existing US tariffs on Chinese imports of $ 360 billion will likely remain in effect after the US presidential elections in November, while Washington reviews compliance with the trade pact.
Investors fear that the global economy will not increase enough to raise corporate profits and share prices if the rates remain in effect for most of this year, said Jim Paulsen, chief investment strategist at the Leuthold Group in Minneapolis.
“People thought that tariffs would be reduced, discussion would cease and manufacturing would be restarted worldwide,” said Paulsen.
The controversial trade talks affected the market for much of 2019 until the signs that an agreement was reached at the end of last year helped lead Wall Street to a series of successive records.
Apparently, the Trump administration would like to maintain influence over China to enforce the trade pact, Paulsen said, while noting that tariffs are only a factor that affects global growth.
“But it is certainly worth a business owner in the afternoon,” he added.
Details are slowly emerging on the agreement. China has pledged to buy nearly $ 80 billion in additional manufactured goods from the United States over the next two years as part of a commercial war truce, a source told Reuters on Monday.
China would also buy more than $ 50 billion more in energy supplies and increase purchases of US services by approximately $ 35 billion during the same two-year period, the source said.
Kristina Hooper, chief strategist at Invesco’s global market in New York, said she doubts that the purchase of manufactured goods by China will reach about $ 80 billion. In addition, China has replaced other countries’ agricultural products since the trade war began, particularly Brazil, he said.
“The reality is that China has been cautious about making specific purchase commitments for some time,” Hooper said. “I don’t see China abandoning Brazil and increasing purchases of American goods so dramatically,” he said.
The worldwide MSCI stock indicator .MIWD00000PUS gained 0.01%, while the pan-European STOXX 600 index closed with a 0.29% rise.
On Wall Street, the Dow Jones Industrial Average .DJI rose 32.62 points, or 0.11%, to 28,939.67. The S&P 500 .SPX lost 4.98 points, or 0.15%, to 3,283.15 and the Nasdaq Composite .IXIC dropped 22.60 points, or 0.24%, to 9,251.33.
Overnight in Asia, Japan’s Nikkei .N225 added 0.7% to reach its highest level in a month. Australian stocks increased by the same margin to close at a record.
Hang Seng .HSI of Hong Kong and blue chips of Shanghai .CSI300 reached peaks of several months before running out of power.
China’s yuan was slightly weaker after reaching a peak last seen in July. The United States Department of the Treasury on Monday revoked its designation of China as a currency handler in what is considered a conciliatory gesture before the trade agreement is signed.
The dollar index .DXY rose 0.04%, with the euro EUR = down 0.06% to $ 1.1126. The JPY yen = weakened 0.03% versus the dollar at 109.99 per dollar.
The Brent crude oil world benchmark index rose, as the trade agreement marks an important step towards ending a dispute that has reduced global growth and affected the demand for crude oil.
The trade dispute had a tangible impact on global oil demand last year, said Tamas Varga, an analyst at the PVM corridor. Varga noted the growth in demand in 2019 of 890,000 barrels per day, compared to the initial forecasts of 1.5 million barrels per day.
Brent LCOc1 crude earned 29 cents to settle at $ 64.49 per barrel and West Texas CLc1 intermediate crude futures rose 15 cents to reach $ 58.23 per barrel.
US consumer prices UU. They rose slightly in December, even when households paid more for medical care, and the underlying monthly inflation slowed down, which supports the Federal Reserve’s desire to keep interest rates unchanged at least during this year.
The weak inflation report from the Labor Department on Tuesday followed last week’s data showing a moderation in employment growth in December. Economists said these developments were marking a sharp slowdown in domestic demand.
10-year reference notes US10YT = RR last rose 10/32 in price to yield 1.8126%.
GCv1 US gold futures were set 0.4% at $ 1,544.60 an ounce.
Report of Herbert Lash; Additional reports by Lewis Krauskopf in New York and Ron Bousso in London; edition by Leslie Adler and Tom Brown