Markets Waver Amid Conflicting Trade Signals From Trump
By Avantika Chilkoti and Paul Vigna
The muted advance in U.S. stocks this week is poised to come to
a halt Friday on fresh concerns over U.S.-China relations after
President Trump signed a bill supporting Hong Kong protesters.
While the Dow Jones Industrial Average index drifted higher to
end Wednesday at yet another record, futures linked to the gauge
edged down during the Thanksgiving holiday. The pan-continental
Stoxx Europe 600 index, meantime, has rallied 1.3% so far this week
as it inched closer to the all-time high it hit in April 2015, and
the Shanghai Composite Index ticked up less than 0.2%.
Mr. Trump's support for the bill, which requires the State
Department to assess Hong Kong's autonomy every year, may raise
fresh hurdles in the trade negotiations between the world's two
largest economies. Speculation about the ultimate outcome of the
talks -- which have been complicated by a range of issues including
the protection of intellectual property rights, the purchases of
agricultural products and the threat of new and existing tariffs --
have led to swings in investor sentiment and markets for months
"It is certainly a notable added complication," said Richard
McGuire, a rates strategist at Rabobank. "But whether China
responds immediately -- and how they respond -- is obviously the
Beijing, which has criticized what it calls U.S. interference in
China's domestic affairs, has shifted focus to whether the
president would implement any of the bill's measures, according to
officials involved in economic policy-making.
Earlier in the week, all three major U.S. equity indexes had
reached records as traders also cheered U.S. economic reports that
showed more growth than expected. Third-quarter gross domestic
product was revised to up 2.1% from 1.9% and October durable-goods
orders rose more than anticipated. Jobless claims for last week
"The economy is not about to fall off a cliff," Gregory Daco,
chief U.S. economist at Oxford Economics, wrote in a note.
"However, the lingering global industrial slump, persistent trade
policy uncertainty and cooling income growth all point to weaker
activity in the coming months."
Mr. Trump had also stoked hopes that negotiations may be
advancing between the world's two largest economies when he said
Tuesday that the U.S. and China were in the "final throes of a very
Despite the short-term gloom, as 2019 draws to a close a slew of
equity indexes have hit new records this week on the back of easy
monetary policy and hopes that geopolitical tensions around trade
and Brexit are set to ease.
Australia's ASX 200 benchmark index closed at a new high
Thursday, followed with a record set by India's Sensex gauge.
Over in Europe, the U.K.'s FTSE 100 equity benchmark declined
0.2% Thursday after a closely watched poll suggested that Prime
Minister Boris Johnson's Conservative Party is poised to secure a
majority in next month's general election. The British pound rose
to a six-month high, and was recently trading at about GBP0.85 to
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and Paul
Vigna at email@example.com
(END) Dow Jones Newswires
November 28, 2019 13:02 ET (18:02 GMT)
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