U.S. President Donald Trump poses for a photo with China’s President Xi Jinping before their bilateral meeting during the G20 leaders summit in Osaka, Japan, June 29, 2019.
Kevin Lamarque | Reuters
The mere prospect of a U.S.-China trade deal is enough to send global markets higher.
On Monday stateside, the S&P 500, Dow Jones Industrial Average and Nasdaq Composite closed at record highs, as did Japan’s Nikkei 225 and South Korea’s Kospi during Asian trading hours. European stocks rose too, but the Stoxx 600 was just an inch away from its all-time high.
And that’s before an agreement has been signed officially.
“A lot of the forecasts for technology have been without the benefit of China, so once you can add China back into the equation, that would probably be fairly optimistic for the markets,” Sam Stovall, chief investment strategist at CFRA Research, told CNBC.
Nvidia, for instance, gave an estimate for the current quarter that excludes H20 shipments to China — a reminder of how trade restrictions have complicated the outlook for U.S. tech giants.
A formal U.S.-China deal that clarifies — and perhaps loosens — trade parameters could prompt Big Tech companies to raise their guidance, potentially igniting another wave of buying in a market already dominated by tech heavyweights.
Beyond silicon and software, soybeans are back in play. Reports suggest China may ease its unofficial boycott of U.S. soybeans as part of the agreement. That would go some way toward assuaging Scott Bessent’s pain because he’s not just the U.S. Treasury Secretary, but also “a soybean farmer,” as he put it in a televised interview.
While Bessent meant that literally — he owns soybean farmland — in the broad trade war between China and the U.S., trade tensions have made daily life more difficult for most of us, turning us all into reluctant farmers of one kind or another. A truce, if it comes, might let everyone harvest some peace.
What you need to know today
Trump suggests an agreement with China is imminent. Speaking aboard Air Force One on Monday, Trump said he and Chinese President Xi Jinping are going to “come away with” a trade deal. The U.S. president also signaled a TikTok deal could come on Thursday.
Amazon is preparing to announce largest layoffs in its history. The cuts, which will impact almost every division, will begin Tuesday, according to a person familiar with the matter. Up to 30,000 employees will be affected, Reuters reported.
Tesla could lose Musk if his pay isn’t approved. That’s according to Tesla Board Chair Robyn Denholm, who warned that Musk’s continued position as CEO hinges on his $1 trillion pay package passing a board vote.
Record highs for U.S. stocks. The three major U.S. indexes and the Russell 2000 rose Monday to close at all-time highs, with the S&P 500 closing above 6,800 for the first time. The pan-European Stoxx 600 added 0.22% amid a broader rally in global stocks.
[PRO] Time to put cash elsewhere when Fed cuts rate. The returns of money market funds depend on prevailing interest rates. When the Fed all but certainly cuts rates, investors should start moving their funds out of cash instruments, analysts say.
And finally…
Gold rebounded on Tuesday as heightened geopolitical uncertainty stemming from Israel-Iran fighting and U.S. President Donald Trump’s call to evacuate Tehran led investors to seek safe-haven assets.
Anindito Mukherjee | Bloomberg | Getty Images
Bars and coins steal the shine from jewelry as Indians splurge up to $11 billion on gold this Diwali
About 700 billion rupees ($8 billion) to 1 trillion rupees ($11 billion) worth of gold was sold during the five-day Diwali festival that ended Thursday, according to the India Bullion and Jewellers Association, or IBJA, and All India Gem and Jewellery Domestic Council, or GJC.
The enthusiasm among Indians over buying gold for investments has been rooted in their search for returns. Gold this year had risen 66% by mid-October, before seeing a sharp slide — but it was still up 55% as of Monday.
— Priyanka Salve