Market Reviews US-China Trade Deal, Global Stocks Halt at Record Highs

Market Reviews US-China Trade Deal, Global Stocks Halt at Record Highs

World shares inched ahead to a record high Thursday after the US and China signed an initial deal to break their 18-month trade conflict, though financial markets had been wary as plenty of thorny issues remained unsolved.

MSCI’s broadest index of world stocks firmed 0.04% in early trade after closing at record level Wednesday while its index on Asia-Pacific shares outside Japan surged 0.21%.

Japan’s Nikkei climbed 0.14% while mainland China’s Shanghai Composite index was almost flat.

U.S. President Trump and Chinese VP Liu He Wednesday signed an agreement that will roll back some tariffs and see China boost purchases of U.S. products and services by $200 billion over two years.

The Part 1 deal nevertheless doesn’t absolutely eliminate the tariffs while the $200 billion purchase goals, which include energy, farm, and manufacturing products, look daunting to achieve.

Nor does it address structural economic points that led to the trade battle. Delegates say these will be addressed in Phase 2 talks, although the differences there are so fundamental that many traders doubt any deal will come through.

On Wall Street, the S&P 500 closed at a record high of 3,289.3 points, up 0.19%, with small gains after the market has recovered for months in hopes of a deal.

The index was dragged down by a drop in financial shares following lackluster earnings from Bank of America and Goldman Sachs.

Bond yields declined as a boost from the trade pact did not balance pressure from low U.S. producer price inflation data, which marked persistently low inflationary strain.

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