Economy

Major US-China trade deal remains unlikely as talks resume

Major US-China trade deal remains unlikely as talks resume”

Tech stocks led Wall Street into the black on Wednesday, capping a three-day losing streak as a report that China was open to a partial deal heartened investors ahead of high-level trade negotiations.

President Xi Jinping's government is under pressure to stem the broadening conflict as the trade war adds to the downward forces on China's slowing economy.

"The rising nationalism sentiment at home is creating hurdles for President Xi to make concessions in the upcoming trade talks with the US in light of the National Basketball Association firestorm and Xinjiang sanctions", said Suisheng Zhao, executive director of the Center for China-US Cooperation at the University of Denver's Graduate School of International Studies. Shanghai shares also rose 0.35%.

"Whichever way the trade winds tend to be blowing is the way the market tends to direct itself", said Sam Stovall, chief investment strategist, CFRA. "Even if China is willing to make some compromise, that space is limited".

All three major USA stock averages were higher, with Microsoft and Apple Inc providing the biggest lift to the benchmark S&P 500.

Trade tensions, efforts to impeach President Donald Trump, signs of slowing economic growth and rising geopolitical tensions have gripped equity markets so far this month, with the S&P 500 and Dow Jones indexes off about 2% since the end of September. The Nasdaq gained 1%.

China is unlikely to be willing to make an easy compromise with a United States president who seems increasingly vulnerable to domestic political pressure as opposition Democrats seek to impeach him, Mitsubishi's Fujito added.

Over the past year and a half, the USA leader has initiated four tranches of tariffs on China, recently postponing additional levies on $250 billion worth of Chinese goods - representing the combined first three tranches. Microsoft rose 1.9% and Citigroup climbed 1.6%. The 10-year US Treasuries yield dropped 3.3 basis points on Thursday to 1.554%.

Oil prices also slid on wariness over US-China talks.

Technology companies and banks led the way higher Wednesday.

Johnson & Johnson fell 2% after a jury in Pennsylvania awarded $8 billion in damages against the company over its antipsychotic drug Risperdal. The euro firmed slightly to $1.0986.



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