Stock market news: September 12, 2019

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The temporary agreement would see the United States delay and reverse some tariffs, in exchange for China's commitment to certain changes in intellectual property and certain agricultural purchases, & nbsp;Bloomberg reported, citing several anonymous people familiar with the subject. The proposal, which apparently has not yet been signed by President Donald Trump, would only represent a temporary pause in the ongoing trade war, rather than a lasting solution. "Data-reactid =" 16 "> The temporary agreement would delay the US and reverse some tariffs, in exchange for China's commitment to certain changes in intellectual property and agricultural purchases Bloomberg, quoting several unknown people familiar with the case, said the proposal, which has not yet been signed by President Donald Trump, would represent a temporary pause to the ongoing trade war, rather than d & # 39; a lasting resolution.

Here are the main movements of the market, starting at 10:16 am:

• S & P 500 (^ GSPC): + 0.45%, or 13.62 points

• Dow (^ DJI): + 0.39%, or 107.1 points

• Nasdaq (^ IXIC): + 0.75% or 61.78 points

• 10 year Treasury return (^ TNX): -1.6 bps to 1.749%

• Gold (GC = F): + 1.42% at $ 1,524.60 an ounce

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Before Bloomberg's report, a series of gestures from United States and China, with the aim of at least temporarily defusing the trade war, had beefed up risky assets. & Nbsp;President Donald Trump on Wednesday announced that it would postpone until October 15, until October 15, additional customs duties on Chinese goods worth $ 250 billion. Trump had announced its intention to raise the rate of duty on these goods to 25% from 25% from 1 October. "data-reactid =" 24 "> Prior to the Bloomberg report, a series of moves by the United States and China to at least temporarily defuse the trade war had strengthened assets at risk, President Donald Trump announced Wednesday that It would postpone the imposition of additional customs duties Two weeks later, on 15 October, Trump announced its intention to increase the rate of customs duty on these products to 30%, against 25% from 1 October.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Trump & nbsp;wrote on Twitter that this "gesture of good will"& nbsp; was "at the request of Chinese Vice Premier Liu He and the fact that the People's Republic of China will celebrate its 70th birthday on October 1st." "data-reactid =" 25 "> Trump wrote on Twitter that this "gesture of good will" was "at the request of Chinese Vice Premier Liu He, and because the People's Republic of China will celebrate its 70th birthday on October 1st".

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This happened a day after the Ministry of Finance of the China & nbsp;announced that 16 US product categories would be exempted from the new tariffsand before a new round of trade talks scheduled for October between negotiators from both sides. "data-reactid =" 26 "> This happened a day after the Chinese Ministry of Finance announced that 16 categories of US products would be exempted from new tariffs, and coming in. another round of planned trade negotiations for October between the negotiators of both parties.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Trump's shot" must be seen as a gesture Goodwill the US has been striving to create good airwaves for the trade talks scheduled for early October, "Hu Xijin, editor of the Global Times publication led by the Chinese Communist Party & nbsp;wrote in a Twitter post& nbsp; Wednesday evening. "data-reactid =" 27 "> Trump's decision" should be seen as a gesture of goodwill that the United States has made to create good vibrations for trade negotiations scheduled for early October ", Hu Xijin, editor of the Chinese newspaper Communist Party-led publication, the Global Times wrote in a Twitter post late Wednesday.

But these seemingly reciprocal measures to defuse the trade war still leave a lot of taxes on consumers and producers in the coming months. December 15, the United States is expected to face a lot of Chinese imports of about $ 160 billion, with a tariff rate of 15%, which was initially pushed back to mitigate some of the effects on holiday buyers. In retaliation, China has promised to fight back with a series of tariffs that same day on about $ 75 billion of US imports.

Even easier

Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Overseas, the wave of easing of the monetary policy that swept the global central banks continued Thursday with & nbsp;Last political decision of the European Central Bank."data-reactid =" 30 "> Abroad, the wave of easing of monetary policy that swept the global central banks continued Thursday with the latest decision of the European Central Bank.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The & nbsp;The ECB cut one of its key rates lower than zero, representing the first such reduction since 2016. He also announced that he would relaunch his quantitative easing program with a plan to purchase 20 billion euros worth of bonds. every month from November for "as long as necessary", with the aim of helping to stimulate the euro zone's economic slowdown. "data-reactid =" 31 "> The ECB has further lowered one of its key rates, which represents the first reduction of this type since 2016. It also announced that it would relaunch its investment program. Quantitative easing with a 20 billion euros buyout plan Each month starting in November, every euro starts to spend "as long as necessary" in order to stimulate the slowing economy in the eurozone.

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The ECB has reduced the deposit rate to an unprecedented minimum of minus 0.5%, compared with less than 0.4% previously. This change, which concerns commercial banks' deposits with the ECB, was widely expected by economists and aimed at encouraging banks to lend to consumers and businesses.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "However, some exceptions apply to the rate of negative deposit The & nbsp;BCE announced that a "two-tier system of reserve remuneration will be put in place, in which part of the banks' excess liquid assets will be exempted from the negative deposit facility rate", thereby reducing in part the Impact on banks' profitability negative interest rates on commercial lenders. However, some exceptions apply to the negative deposit rate. a two-tier system of reserve remuneration will be put in place, in which part of the bank's excess assets will be exempt from the negative deposit facility rate. This partly reduces the impact on banks' profitability of negative interest rates on commercial lenders.

At the same time, the ECB also announced that it would leave its key rate at 0.000%, which would avoid negative rates for savers.

The euro fell below 1.10 US dollar against the US dollar immediately after the ECB decision. US Treasury bond yields followed the decline in UK and German government bond yields after the ECB lowered interest rates, and gold has again risen above $ 1,500. # 39; ounce.

The story continues

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The ECB decision comes a week before the federal decision The reserve should unveil its own monetary policy decision. Market participants widely expect the Fed to lower benchmark interest rates for the second time in 2019, with markets taking into nbsp;Probability 88.8%& nbsp; from Thursday morning. "data-reactid =" 51 "> The ECB decision comes a week before the US Federal Reserve is about to unveil its own monetary policy decision, with market participants widely expecting the Fed to lower interest rates. Reference interest for the second time in 2019, the markets expecting a probability of 88.8% to obtain such a result, as of Thursday morning.

Consumer prices reached their highest level in a year

A measure of the change in basic consumer prices reached its highest level in a year in August, as rising prices for medical care and health insurance propelled reading upward.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The & nbsp;Consumer Price Index (CPI) of the Ministry of Labor, which excludes food and energy prices, rose 0.3% from the previous month in August. Over the past year, the core CPI rose 2.4%, the fastest annual gain since July 2018, when the same pace was recorded. "Data-reactid =" 54 "> The basic index of consumer prices (CPI) of the Ministry of Labor, which excludes energy prices rose by 0.3% compared to the previous month in August, while the core CPI rose 2.4%, the fastest annual gain since July 2018, when the same pace was recorded.

According to Bloomberg estimates, these results were higher than the expected Bloomberg increases of 0.2% and 2.3% expected on a monthly and annual basis in August, respectively.

At the same time, the overall broad CPI rose 0.1% on a month and 1.7% year-on-year, slightly below the expected 1.8% increase.

The apparent increase in core consumer prices reflected in the CPI suggests that the Fed may need to re-evaluate the opportunity to further reduce rates as inflation accelerates. . Some economists have noted, however, that the CPI results are unlikely to be reflected in the reading of basic personal consumption expenditure (PCE), which is the preferred measure of core inflation by the Fed.

"Health care is important. Medical care services grew by 0.9% in the CPI, but this will not happen in the ECP, "wrote Neil Dutta of Renaissance Macroeconomics in a note. "The CPI only covers non-refundable expenses, while PCE covers payments made on your behalf. The contribution of PPI health care, which is the reason for leaving PCE, was unchanged in August. "

Dutta also noted that other factors contributing to the rise in the August CPI, such as rising prices for used cars, are unlikely to repeat in the coming months.

Other economists shared these feelings. Andrew Hunter, economist at Capital Economics, said the rise in the core CPI in August "will not stop the Fed from further lowering interest rates next week, but offers an additional reason to believe that the expectations significant easing will ultimately be disappointed ".

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