World stocks rose to a six-month high on Tuesday as the preliminary U.S.-Mexico deal eased fears of a global trade war.
The preliminary deal was reached between the US and Mexico called the United States-Mexico trade agreement.
“They used to call it Nafta,” said Donald Trump. “We’re going to call it the United States Mexico Trade Agreement.”
“The name NAFTA has a bad connotation because the United States was hurt very badly by NAFTA,” he added.
Investors are hopeful that Canada will also be joining the three-nation pact.
Following the news, S&P 500 futures gained as did the tech heavy Nasdaq Composite. Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX) and Alphabet (NASDAQ: GOOG) could build on gains from last week when the Nasdaq closed at 8,017.90.
Art Hogan, a chief market strategist at B. Riley FBR, said: “The market has been buffeted with a lot of headwinds lately, and the biggest one is trade. If you were to take trade out of the picture, you would have a smoother ride higher in this market.”
A spokesman for Canadian Foreign Minister Chrystia Freeland said Canada is in contact with trading partners and hopes to reach a deal by the end of the week.
“We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada’s signature is required,” said the spokesman.
The outgoing Mexican President, Enrique Peña Nieto, said he has had talks with the Canadian prime minister, Justin Trudeau and that they are working toward a three-way agreement.
“I expressed the importance of his reinstatement in the process,” said Nieto said. “In order to conclude a trilateral negotiation this week.”
“It is our wish, Mr. President, that now Canada will also be able to be incorporated in all this. I assume that they are going to carry out negotiations of the sensitive bilateral issues between Canada and the United States,” he added through a translator.
