Remember last week when markets got all optimistic at the possibility that U.S. President Donald Trump and China’s President Xi Jinping would be able to hammer out an end to the U.S.-China trade deal when they meet at the Group of 20 meeting in Buenos Aires on November 30-December 1? A report that President Trump had ordered his staff to prepare a negating letter sent stocks higher.
Well, maybe not quite so quickly.
In a speech in Shanghai on Monday President Xi hit back against the Trump administration’s “America First” policies and denounced “beggar-thy-neighbor” trade practices. “All countries should strive to improve their business environment and solve their own problems,” Xi told the China International Import Expo. “They shouldn’t always whitewash themselves and blame others, or act like a flashlight that only exposes others, but not themselves.”
Conspicuously absent from Xi’s speech were any proposals that would meet U.S. demands for an end to subsidies for state-owned enterprises or increased Chinese protection for intellectual property rights.
In response Trump hung tough on Monday. “We’re in a very big dispute with them right now, and we’re winning,” Trump said on a conference call. China wants to make a deal, but if they don’t that’s fine as well, he said.
Today, Tuesday November 6, the mid-term election pretty much overwhelmed anything else in the headlines.
The Standard & Poor’s 500 stock index was up 0.15% as of 2:30 p.m. in New York. The Dow Jones Industrial Average was ahead 0.21%. The NASDAQ Composite was barely in the green at 0.05%. The small cap Russell 2000 again led markets with a 0.44% gain. The iShares MSCI Emerging Markets ETF (EEM) fell 0.55%.
Oil continued to retreat on the news that the United States had granted exemptions from its sanctions on Iran to eight countries including big Iranian oil buyer China. West Texas Intermediate fell 1.54% to $62.13 a barrel. International benchmark Brent crude dropped 1.59% to $72.01 a barrel.
The yield on the 10-year Treasury edged upward by 1 basis point to 3.21% and the yield on the 2-year Treasury held above what had been a tough to break barrier near 2.85% at 2.92% The dollar was essentially steady with the Dollar Spot Index ahead 0.03%.
The CBOE S&P 500 Volatility Index (VIX) continued to creep higher rising 1.2% to 20.20.