U.S. stocks closed at record highs as investors assessed the details of the partial trade deal with China. Treasuries gained and the dollar weakened.
The benchmark S&P 500 finished short of an earlier all-time intraday high after President Donald Trump presided over a signing ceremony with Chinese officials. The deal commits China to do more to crack down on the theft of American technology and corporate secrets by its companies and state entities, while outlining a US$200 billion spending spree to try to close its trade imbalance with the U.S. Soybeans slumped after China signaled purchases would be demand-based.
“While it does not appear that the ‘phase one’ deal addresses many of the structural issues that started the trade spat, it does mitigate the uncertainty that ongoing trade tensions present, namely the threat of new tariffs at a moment’s notice,” said Jason Pride, chief investment officer of private wealth at Glenmede Trust Co. in Philadelphia.
The S&P 500 set an intraday record for the sixth consecutive trading session, largely ignoring disappointing quarterly results from Goldman Sachs Group Inc. and Bank of America Corp. The Nasdaq Composite and Dow Jones Industrial Average indexes also set fresh highs. U.S. markets received an added boost earlier after White House economic adviser Larry Kudlow promoted more tax cuts.
Commodity markets got some numbers on China’s commitments to buy agricultural products, but doubts remain. Currency traders assessed the section that reaffirmed existing G-20 commitments, and investors in tech stocks pored over details on intellectual property concessions.
“It’s anti-climatic,” said Jim Paulsen, chief investment strategist at the Leuthold Group. “It was in there and people knew this for a while now, it’s about what you thought.”
Meanwhile, the Stoxx Europe 600 Index finished little changed, while equities across most of Asia fell.
Russia’s currency weakened as much as 0.6 per cent against the dollar. President Vladimir Putin replaced his long-serving prime minister and called for sweeping constitutional changes, fueling speculation that the Russian leader is moving to extend his grip on power beyond the end of his term in 2024.
Oil futures drifted, with West Texas Intermediate trading around US$58 a barrel. Gold nudged higher.
Here are some events to watch for this week:
It’s earnings season for the biggest American financial institutions, with Morgan Stanley and Bank of New York Mellon Corp. still to come.
The Federal Reserve’s Beige Book report on regional economic conditions is due on Wednesday.
China GDP, along with key monthly data for December, come on Friday.
A final reading on the euro-zone’s December inflation is also due on Friday.
There are some of the main moves in markets:
The Dow Jones Industrial Average increased 0.3 per cent to 29,030.28, the highest on record.
The Nasdaq Composite Index climbed 0.1 per cent to 9,258.70.
The MSCI All-Country World Index advanced 0.1 per cent to 573.80, the highest on record.
The Stoxx Europe 600 Index was little changed at 419.63.
The Bloomberg Dollar Spot Index decreased 0.1 per cent to 1,191.76, the lowest in a week.
The Japanese yen strengthened 0.1 per cent to 109.90 per dollar, the largest rise in more than a week.
The euro gained 0.2 per cent to US$1.1151, the strongest in a week on the biggest gain in more than a week.
The British pound gained 0.1 per cent to US$1.3028.
The yield on two-year Treasuries fell one basis point to 1.56 per cent, the lowest in a week.
The yield on 10-year Treasuries fell three basis points to 1.78 per cent, the lowest in almost six weeks.
Germany’s 10-year yield declined three basis points to -0.20 per cent, the biggest drop in more than a week.
Britain’s 10-year yield decreased seven basis points to 0.654 per cent, the lowest in seven weeks on the largest dip in six weeks.
West Texas Intermediate crude declined 0.4 per cent to US$57.96 a barrel, the lowest in six weeks.
Gold strengthened 0.6 per cent to US$1,556.05 an ounce.