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On Wednesday, US Trade Representative Robert Lighthizer said the Trump administration had dropped the possibility of significantly increasing tariffs on China. Although this decision has received little reaction from the Dow Jones, analysts expect the US stock market to regain momentum in the coming weeks.
Trump Adviser: tariff increases are out of place
Since February 22, for more than a week, the Dow Jones remained relatively stable at nearly 26,000 points, edging down slightly after the 26,200-point break on February 25.
The Dow has already made a gigantic recovery since the end of 2018, but the recovery of the US stock market may well begin. (Source: Yahoo)
As US President Donald Trump pushes talks with China to reach a comprehensive trade deal, the threat of additional sanctions having been removed, the Dow should recover until the end of the quarter.
The US economy is growing with the elimination of tariffs, fueling optimism at Dow Jones
Earlier this week, Lighthizer reportedly said after a meeting of the House Ways and Means Committee that the United States and China had reached a consensus on ways to integrate and enforce the agreement. whether a global agreement should be concluded in the short term.
Due to strong fundamentals and optimistic forecasts for the advancement of the trade agreement, the US economy grew by 2.6% in the last quarter of 2018, exceeding the expectations of Wall Street analysts.
SNAP! The US economy grew 2.6% (annualized) in the first quarter, more than expected, year-over-year #GDP growth 3.1%. pic.twitter.com/JhudI6cRzX
– jeroen blokland (@jsblokland) February 28, 2019
Most key sectors, including finance and technology, struggled in the fourth quarter, forced to revise their earnings downward.
Conglomerates like Apple and Tesla attributed their low incomes in the Asian market to the uncertainties of the trade discussions of the time.
"Our sales of Model S and Model X in China have been negatively affected by some tariffs on US-made automobiles," said Tesla in a document filed with the US Securities and Exchange Commission (SEC).
Tesla, for example, was priceless in the Chinese market, with prices pushing the company to sell its model 3 at $ 99,400, a vehicle sold for $ 35,000 in the United States.
"When Tesla opened its first orders for the Model 3 in China in November, only Full Performance and Performance all-wheel drive versions were available, at RMB 580,000 (about $ 83,500) and RMB 690,000 (99,400) respectively. USD), "Electrek reported on December 24, 2018.
However, the strength of the US labor market, middle-class tax cuts, and rising household incomes have shown that record household balances have pushed consumer spending upward, allowing US economy to grow by 2.6%.
George Whittier, president of Morey Corp, told The Wall Street Journal that, if business growth steadily increases, it could grow faster if geopolitical risks are eliminated.
He said:
"We are seeing nice and steady growth, but we think it should be a little stronger than it is. The overall cost of tariffs continues to grow, forcing users to rethink their purchasing strategies, resulting in uncertainty and slowness. "
With robust fundamentals and the Federal Reserve's patience on its rate in place, the missing puzzle could fuel the momentum of the US stock market and the Dow Jones is a trade deal with China, which experts are predicting in the near term . .
US and China near final phase of trade talks
According to Treasury Secretary Steven Mnuchin, the United States and China are currently working on a 150-page document aimed at concluding a comprehensive trade agreement.
Director of the National Economic Council of the White House, Larry Kudlow, firmly stated that the United States was moving toward a historic agreement, which could be signed by Donald Trump and Chinese President Xi Jinping in the coming weeks.
"The progress has been great. We have to hear President Xi and the Politburo, of course, but I think we are moving towards a remarkable historic agreement, "said Kudlow.
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