Markets have finally given in to realism and assumed a stance of limited optimism in regard to any potential Sino-US trade deal.
After appearing to happily chase the story in regard to trade war and tariff progress over the last few months, markets now seem ready to concede that any friendly chatter between the two isn’t worth reading into. If we have learned anything from the failed attempts to-date: if Trump’s bravado and ego hold out, do not expect China to come crawling to the POTUS for a deal.
Following the non-news of trade deal progress, US and UK indices were muted as markets closed on Monday.
Speaking on market movements, Spreadex Financial Analyst Connor Campbell commented,
“The Dow Jones paused on Monday, unable to strike the fresh record highs promised pre-open.”
“The US index lurked under 28000 after the bell, news of ‘constructive discussions’ between Washington and Beijing over the phone on Saturday morning failing to impress investors. Given its current levels, the Dow may need something a bit more substantial from the superpowers if it is to level-up once again.”
“The FTSE echoed its American peer, the index sitting pretty much unchanged the wrong side of 7300. That it avoided a serious loss, however, is notable considering sterling’s gains. With the Tories currently on track for a majority after December’s election, the pound added 0.4% against the dollar and 0.2% against the euro.”
“In comparison to the UK and US, the Eurozone was in a real bad mood on Monday. The DAX and CAC fell 0.6% apiece, take the German index to 13150 and the French bourse under 5900.”
On the whole, markets were also left deflated by Saudi Aramco’s decision to revise the ambition on their IPO and the UK property market uncertainty.
European indices were also weighed down by Volkswagen (ETR: VOW3) highlighting a gloomy outlook for 2019, despite Airbus SE (EPA: AIR) winning a $30 billion order for 170 aircraft.