Trade truce headlines boosted stocks globally, but they are likely to be a short-lived positive since trade talks between the U.S. and China could drag on for months and result in more tariffs before there is a deal.
Trade sensitive stocks, like Apple and Caterpillar were higher. Semiconductor stocks also rallied, and those that do business with Huawei, like"We still expect a 10 percent correction during 3Q as this past week'send's agreement is viewed as a sell the news event," wrote Morgan Stanley chief U.S. equity strategist Mike Wilson.
Morgan Stanley's Wilson said he would fade the rally in junk and value and cyclical stocks, which have been rising on hope for a deal. He said there is a growing view that the Fed could and possible trade deal could stop economic slowing. ISM manufacturing data, released Monday, slipped to 51.7 from 52, but was better than the 51 expected. New orders in the report were at 50, just barely signaling expansion, and down from 52.7 in May.
Trump’s handling of all this is a joke. Been spewing for last year that Huawei is a national security threat, now using it as a bargaining chip in trade. You can’t have your cake & eat it too. Really worrysome that the man handling this is so ignorant with no coherent strategy.
As usual CNBC and market strategists have it all wrong!. The first step to a trade deal is to declare a truce, that has been done. I fully expect a deal to be signed very shortly, could be done at any time. Then watch the stock market take-off!
Agree. The hope of rate cute will be short lived as well. Eventually earnings will have the biggest and longest effect.
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