Global stocks were mostly higher on Monday, as the US government eased fears about a trade war with China, which has put markets on edge over the past weeks.
S&P 500 futures gained 0.4 percent to $2,621.25, while the Nasdaq 100 futures were up by 1.2 percent to $6,538.25. The Dow Jones Industrial (DJI) Average climbed 0.7 percent to $24,114.76.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.8 percent to $565.36, while the STOXX Europe 600 dropped 0.1 percent to $374.26.
Japan’s Nikkei 225 closed 0.5 percent higher to ¥21,678.26, while South Korea’s KOSPI index raised 0.60 percent to ₩2,444.80.
Hong Kong’s Hang Seng added 1.2 percent to HK$30,229.58, while Shanghai composite increased 0.2 percent to CN¥3,138.29. Australia’s S&P/ASX 200 also rose by 0.3 percent to A$ 5,808.70
UK’s FTSE 100 was down by 0.2 percent to £7,167.47, while France’s CAC 40 declined by 0.01 percent to €5,257.79. Germany’s DAX fell by 0.1 percent to €12,227.31.
Analysts said the increases are not certain, as China has shown willingness to enter talks with the US in recent months.
Trump Administration Softens Trade War Fears
Stock markets’ optimism came after officials in President Donald Trump’s administration stated on Sunday that the tariffs have not been imposed yet and that the disagreement could still be resolve through negotiations.
Treasury Secretary Steven Mnuchin said he does not expect a trade war, while National Economic Council Director Lawrence Kudlow stressed that nothing has happened so far.
Trump reverberated this by tweeting that China will take down its trade barriers, since it is the right thing to do, that any tariffs will become reciprocal and a deal will be agreed on intellectual property.
The issue is still expected to control markets for a while, since public talks on US tariff proposals may require a significant amount of time, which suggests that the earliest they might be able to implement the charges is somewhere around late July or early August.
However, there are some that still got slightly more worried than last month. Chief investment officer Jae Yoon said they were a bit more concerned than before, given how severe tariffs can get when everybody starts to play.
Though he added that chances of trade tensions could negatively affect the market are as strong as the chances a strong earnings period could bolster shares.
The start of the first-quarter profits season is due later this week. A financial research firm stated that 53 S&P 500-listed companies had announced positive earnings guidance for the quarter as of last week, which is the highest number since 2006.
Analysts said the improvement was also due to reports about North Korea confirming its willingness to talk denuclearization of the Korean Peninsula with the US.
Senior investment manager James Athey stated that the pattern of interactions between the US and North Korea, the tough stand from the US, which was later followed by signs of a more agreeable deal may offer hints about the outcome of the US and China trade negotiations.
Athey said he did not see anything to deter him of the opinion that they are on track for an amicable trade agreement between the two countries, adding that for him; this is an opening act in a negotiation, which should eventually result to a stronger trading relationship between the US and China.
FSMNews provides you the latest happenings on the market. Subscribe now to FSMNews and get up to date information on forex, commodities, stocks, technology, economy and a lot more.