Stocks Advance on Fresh Hopes for U.S.-China Deal: Markets Wrap

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Stocks rose and bonds fell on speculation the U.S. and China will reach a deal that avoids tariffs due to take hold in 11 days.

The S&P 500 Index halted a three-day slide after Bloomberg News reported negotiators are getting near an agreement on the amount of tariff relief in a phase-one accord between the world’s two largest economies. President Donald Trump said discussions with China are going very well, just a day after downplaying the urgency of a deal. Treasury 10-year yields climbed, following the biggest decline since August. The dollar dropped. Oil surged.

Investors are watching for any signs of progress in talks between Washington and Beijing as worries increase that Trump may slap more tariffs on China this month. A flood of trade news has whipsawed global markets, with the U.S. also threatening levies on France after hitting steel from Brazil and Argentina. American equities reached record highs in November, driven in part by optimism that at least an initial trade deal was in the offing.

“You wake up every single day and see that the number one thing that’s dictating markets is trade,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management. “If those tariffs are avoided, then the recent gains in the market will likely hold.”

On corporate news:

• Expedia Group Inc. surged as Chief Executive Officer Mark Okerstrom and Chief Financial Officer Alan Pickerill resigned after clashing with the board on the online travel agency’s direction.
• Cloud software stocks fell as disappointing forecasts from Workday Inc. and Salesforce.com Inc. added to concern about slowing growth.
• Peloton Interactive Inc. slumped as a report said it lowered the price of its digital subscription app for workouts in an effort to appeal to more users.

Elsewhere, oil rallied as Energy Information Administration data showed U.S. crude inventories fell more than expected. The British pound touched the highest against the euro since May 2017 as traders stepped up bets on a win for the Conservatives in next week’s election.

Here are some key events coming up this week:

• Germany releases factory-order data for October on Thursday.
• Saudi Aramco’s initial public offering is scheduled to be priced on Thursday, with Riyadh looking to raise more than $25 billion.
• Friday brings the U.S. jobs report, where estimates are for non-farm payrolls to rise by 190,000 in November.

These are the main moves in markets:

Stocks

• The S&P 500 climbed 0.6% to 3,112.76 at 4 p.m. New York time.
• The Stoxx Europe 600 Index rose 1.2%.
• The MSCI Asia Pacific Index dipped 0.7%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%.
• The euro was little changed at $1.1077.
• The British pound climbed 0.8% to $1.3105.
• The Japanese yen weakened 0.2% to 108.85 per dollar.

Bonds

• The yield on 10-year Treasuries rose five basis points to 1.77%.
• Germany’s 10-year yield climbed three basis points to -0.32%.
• Britain’s 10-year yield jumped seven basis points to 0.741%.

Commodities

• West Texas Intermediate crude surged to $58.43 a barrel.
• Gold fell 0.3% to $1,480.20 an ounce.

--With assistance from Adam Haigh, Todd White, Sam Potter and Robert Brand.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita Nazareth

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