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U.S. stocks rose for a third day after President Trump proclaimed in a tweet that “talks with China are going very well!” and trade negotiations between Washington and Beijing were extended another day. Here are some of the things people in markets are talking about.
Trade Talks Extended
President Donald Trump is increasingly eager to strike a deal with China soon in an effort to perk up financial markets that have slumped on concerns over the trade war, according to people familiar with internal White House deliberations. U.S.-China trade talks in Beijing will extend into Wednesday, an American negotiator said, while some key U.S. economic advisers are campaigning for a quick resolution to the trade conflict to help soothe battered markets. The discussions during the past two days “went well,” according to Steven Winberg, an Energy Department official who spoke to reporters in Beijing. “I can confirm we’re continuing tomorrow.” The reason for the extension of meetings originally scheduled for two days wasn’t immediately clear. President Donald Trump earlier expressed optimism in a tweet, exclaiming “Talks with China are going very well!” Chinese authorities plan to give a statement following the latest round of negotiations.
Stocks Continue Rally
Asian stocks looked set to follow a rally in U.S. shares as the possibility of progress in trade talks with China overwhelmed skepticism about the financial sector. The dollar rose, Treasuries slumped and crude surged toward $50 a barrel on expectations the market will be tightened by OPEC’s output cuts. All major indexes were higher, led by the small-cap Russell 2000 Index for a second day. The S&P 500 Index gained 1 percent on strength in transportation companies, carmakers and telephone stocks. Financials were only major industry group in the benchmark that didn’t rise. Boeing Co. helped lift large-caps with a strong fourth-quarter delivery report.
Kim Jong Un Visits China
Kim Jong Un is making his fourth visit to China, in a sign that the North Korean leader is seeking Chinese President Xi Jinping’s counsel ahead of a possible second summit with Donald Trump. Kim left Pyongyang Monday for a visit slated to end Thursday, North Korean and Chinese state media reported. Kim was invited by Xi and accompanied by his wife Ri Sol Ju and several top officials on his train journey across the border, the state-run Korean Central News Agency said. Xi and Kim met for an hour and had dinner, South Korea’s Yonhap News Agency reported, without citing anyone. The trip -- Kim’s fourth to China since March -- suggests negotiations over North Korea’s nuclear arsenal are gaining momentum after months without high-level diplomatic exchanges.
World Bank Cuts Global Growth Outlook
The World Bank cut its forecast for the global economy as slowing growth in trade and investment and rising interest rates sapped momentum, especially in emerging markets. Downside risks to the world economy have become more acute, including the threat of “disorderly” market movements and an escalation of trade disputes, the development lender said Tuesday in its semi-annual update to its global outlook. Debt vulnerabilities in emerging markets and developing countries have increased, it said. The Washington-based bank expects global growth of 2.9 percent this year, down from 3 percent in 2018 and a reduction of 0.1 percentage point from its forecast in June. The bank lowered its projection for growth in emerging markets by 0.5 point to 4.2 percent, and slightly downgraded its outlook for expansion in the euro area.
Trump Allies Press Crisis Powers
U.S. President Donald Trump’s conservative allies are urging him to declare a national emergency to build his proposed border wall, though he isn’t expected to do so in his address to the nation Tuesday evening. The move comes as Wall Street is starting to take President Donald Trump’s threat to keep the government shuttered for "months or even years" over his proposed border wall more seriously. Stocks like Macy’s Inc., Chipotle Mexican Grill Inc., Monro Inc., and Hyatt Hotels Corp. are some of the consumer-facing firms most exposed to the Washington, D.C., metro area, where federal workers will miss their first paychecks on Jan. 11, Jefferies analysts wrote in a note today.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- China and India could be the world’s largest economies by 2030.
- Deutsche Bank plans to slash its bonus pool by 10 percent.
- In Carlos Ghosn’s jet-set world, a $120 million fortune can be peanuts.
- Jokowi wants to save billions lost to Jakarta’s infamous traffic. \
- HSBC’s gender pay gap, the worst in U.K. banking, is now even bigger.
- Manchester United to open interactive centers in China.
- Oracle’s Ellison builds a $1 billion Tesla stake to become top investor.
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