S&P 500 Drops as Trump Announces Partial Trade Deal
US-China Trade Agreement Talking Points:
- US and China reach partial deal as Trump announces the completion of phase-one of the trade agreement
- Both sides gave concessions in a show of goodwill over the past two days of talks
- The S&P 500 lost ground into the close as news of the deal crossed the wires, although the key index finished up 1.09% on the day
The US and China came to a partial agreement today after two days of talks between chief negotiators as President Trump announced phase one of a US-China trade deal is complete. President Trump commented that China’s President Xi and himself could sign a deal next month at Chile's APEC November 15-16. The markets have enthusiastically been pricing in hopes of a partial deal with the S&P 500 rallying nearly 2 percent this week before traders started to hit the sell button as news crossed the wires, with the key index settling at 2970.01 to finish the trading day.
S&P 500 (SPX) 30-Min Chart
Both sides made concessions during the latest 2-day round of trade talks including China agreeing to step up their purchases of US agriculture products and agreed to some measures on intellectual property, although no specifics on those measures were given immediately. The US in turn agreed to delay tariffs that were set to go into effect next week, but it was unclear if December tariffs were still set to go in place. This agreement marks the first substantial progress in trade talks that have been going on for 18 months now.
After market close Treasury Secretary Mnuchin stated that the US will review its labeling of China as a Currency manipulator. While Mnuchin also said that fundamental issues have been ironed out, Huawei China’s state-owned telecom giant is not part of the deal according to the Treasury Secretary.
--Written by Thomas Westwater, Intern Analyst for DailyFX.com
Contact and follow Thomas on Twitter @FxWestwater
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