Market Overview

Market Awaits Confirmation Of US-China Trade Deal

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Market Awaits Confirmation Of US-China Trade Deal

As of Friday morning, China had yet confirmed a Phase One trade deal, and the U.S. had offered no details on the agreement reported Thursday night.

Nobody seems to know what’s going on, but the markets have a hunch: the SPDR S&P 500 ETF Trust (NYSE: SPY) steadily surged on the early confidence of U.S. officials but abruptly plummeted Friday morning, betraying a loss of faith in any progress.

Chinese officials have scheduled a press conference for 9:30 a.m. Friday, according to CNBC

China Says Agreement 'Must Be Mutually Beneficial' 

The U.S. and China were reported Thursday to have agreed on a Phase One deal. Negotiators from both sides met earlier in the day, and President Donald Trump was said to have approved an agreement that included China buying $50 billion of U.S. agricultural products next year and the U.S. delaying $160 billion in tariffs that were scheduled to take effect Sunday.

Policy details were expected Friday.

Friday came, and China had yet to confirm an agreement. Instead, Foreign Ministry spokesperson Hua Chunying released a statement asserting that “any agreement must be mutually beneficial.”

Throughout the morning, Chinese officials continued to talk about the U.S. relationship as if no breakthrough had occurred.

“We urge the U.S. to get cool-headed as soon as possible and put its China view and world view in proper perspective,” Chinese spokesperson Wang Yi said at a news briefing. “We urge the U.S. to work with us for a relationship of no-conflict, no-confrontation, mutual respect and win-win cooperation.”

Without a deal, the U.S. and China will enact another round of tariffs that would in turn raise consumer prices and threaten economic growth. The decline in the S&P 500 ETF demonstrates the market’s concern for this result.

Both China and the U.S. are set to effect new tariffs Sunday. The U.S. would need to publish a federal registry notice Friday to suspend its levies on $160 billion of imports.

Related Links:

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