fbpx
Skip to content Skip to sidebar Skip to footer
Advertisement

LONDON, U.K. – Hopes for the still ongoing US-China trade agreement revives the global stock market on Friday, but Hong Kong and Chile’s escalating protests are leaving some deep scars.

The main changes in Europe’s market, which followed the uptrend momentum of the Asian market, came after Larry Kudlow, an economic advisor from the White House, said on Thursday that China and the US are talking every day and now getting close to signing an agreement.

He told during an event held at the Council on Foreign Relations on Washington, commenting on the long-standing trade talks, that they are getting close. He also added that the mood for the recent trade talks has been pretty good, which hasn’t always been that way.

The comment from the economic advisor spiked hopes that both the MIWD00000PUS, the 49-country world index of MSCI, and the STOXX 600 of Europe could avoid the falls in the first week since early in October.

However, not all indexes were able to avoid the pitfall. MSCIEF, an emerging stock market, for one, declined to about 1.7% during the week. The Hang Seng also went down to 4.7% HSI amid the long-standing pro-democracy protests that have been bugging the Hong Kong market. It’s listed as the lowest weekly performance for Hang Seng in four months.

The Chinese CSI300 blue-chip stocks also ended with a low 0.75% and 2.4%, their lowest performance since August.

Based on a statement from the chief economist at Sydney’s AMP Capital, Shane Oliver, he compared the bullish reaction of the regional market to the positive trade news to a relationship of an alcoholic, which is mainly driven by hopes for a recovery.

According to him, markets want to trust that there’s going to be some resolution to this problem or a lasting truce, even with the negative implications it has done for that last 18 months. However, he also said that next year’s presidential election and the weakening of both the US and Chinese economies are putting pressure on both countries to finalize the trade agreement.

In the currencies front, the dollar rises to about 0.17% as the safe-haven yen (JPY) weakens.

From a poll done with 100 economists, results show that although the concerns about the US recession have eased a bit, only a few economists expect an economic rebound. Most also believe that reaching a trade truce is not likely to happen this year.

Leave a comment