U.S. With fears of tightening global trade restrictions weakening, stock markets rebounded on Monday after suffering their worst week since January 2016
Wall Street appears to be reducing the chances of a full-scale trade war. There are signs that China and the US are in negotiations to overcome their trade differences and avoid a continuing struggle that could harm the global economy.
In the last hour of trading on Monday, the Dow Jones Industrial Average was at its highest level of the day, rising more than 600 points or 2.5% and back above the 24,000 level.
Last week, however, the blue-chip average fell more than 1,400 points, or 5.7%, as traders responded to President Trump's suggestion to raise $ 60 billion in tariffs on Chinese imports. Beijing retaliates with threats to pay $ 3 billion in import fees List of US goods
Investors now seem to be negotiating that the announcement of tariffs for the world's top two economies last week focused more on negotiating tactics as a real desire of the US or China aimed to lift the trade warfare to a more aggressive level.
"The 2% (rally) came from the news that the US and China are negotiating to open markets," says Gary Kaltbaum, president of Kaltbaum Capital Management.
On Monday, Peter Navarro, a White House trade advisor, said that the US "talks to the Chinese" and that it "hopes China will work with us" for the US $ 375 billion trade deficit close the second largest economy in the world. At the weekend, Finance Minister Steven Mnuchin told Fox News that the US is trying to reach a deal with China.
The recent consideration on Wall Street is that both sides will have too much to lose in a trade war and work on it.
"There is too much at stake," says Joe Quinlan, senior market strategist US Trust. "Politicians understand that the best and fastest way to harm their constituents is a trade war and denying voters cheap goods from around the world as they stock up on global financial markets."
How Many Asset Managers Says Kaltbaum The talk of a trade war in the last week was exaggerated.
"It's just a bunch of positioning back and forth," says Kaltbaum. "Both parties do not know anything good about a trade war and something would be found out ̵