While you were sleeping: Equities, oil climb as Xi calms trade worries
By Margreet Dietz
April 11 (BusinessDesk) - Equities on both sides of the Atlantic climbed, as did the price of oil, as Chinese President
Xi Jinping said he remains committed to opening up the country’s economy, calming concerns about a global trade war.
In his keynote address Tuesday to the Boao Forum for Asia, Xi pledged a “new phase of opening up,” according to
Bloomberg.
Wall Street gained. In 1.24pm trading in New York, the Dow Jones Industrial Average gained 1.7 percent, while the Nasdaq
Composite Index rose 1.6 percent. In 1.09pm trading, the Standard & Poor’s 500 Index advanced 1.4 percent.
“What you are seeing in the market is an alleviation of trade war fears and people trying to get back in and reposition
themselves for what they hope—no trade war,” Robert Pavlik, chief investment strategist and senior portfolio manager at
SlateStone Wealth in New York, told Reuters.
The Dow rose, led by gains in shares of Verizon and those of DowDuPont, recently up 4.1 percent and 3.5 percent
respectively. Shares of Nike slipped, down 0.6 percent each recently, and was the only stock in the Dow to trade lower
in early afternoon.
“China is not interested in a trade war for sure, but the US is not bluffing either,” Hans Goetti, founder of HG
Research, told Bloomberg. “The truth is that the US wants to come out on top of this, but I do know at some point there
would be negotiations.”
Brent crude futures rose 2.9 percent, as did West Texas Intermediate crude futures.
“It’s not so much ‘risk on/risk off’, as it is ‘trade war on/trade war off’ and, at the moment, we’re ‘trade-war off,’”
London Capital Group’s Jasper Lawler said, Reuters reported.
US Treasuries slipped, lifting yields on the 10-year note one basis point higher to 2.79 percent.
Meanwhile, a Labour Department report showed US producer prices rose more than expected in March, climbing 0.3 percent
from the previous month. It came a day before the Federal Reserve will release minutes from its March meeting during
which it lifted its key interest rate a quarter point and stuck to its guidance for two additional increases this year.
“The surge in producer price inflation is another sign that inflationary pressures are building rapidly," Paul Ashworth,
chief US economist at Capital Economics, said in a note. "A lot of the recent surge in final demand producer prices is
concentrated in the consumer services components, which means it is almost guaranteed to spill over into the CPI and PCE
consumer price measures."
"At the same time, the weaker dollar and labour market tightness are driving up consumer goods producer prices too,"
according to Ashworth, adding that he expects the Fed to hike rates an additional three times this year.
In Europe, the Stoxx 600 Index finished the day with a 0.8 percent climb from the previous close. France’s CAC40 Index
gained 0.8 percent, the UK’s FTSE 100 Index increased 1 percent, while Germany’s DAX Index added 1.1 percent.
(BusinessDesk)
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