This week the markets are starting off with a new round of cautious optimism regarding the United States and China reaching a trade agreement soon. Despite a recent deterioration in the relationship between the two countries caused by a US bill that makes the signing of a trade agreement conditional upon China handling the Hong Kong protests in a peaceful and orderly manner, Donald Trump chose diplomacy and decided not to sign the bill just yet in an attempt to please China.
Nevertheless, we are approaching the December 15 deadline when a new round of tariffs on Chinese goods will come into effect. We would likely see the tariffs become a reality, as there is not enough time for the two presidents to agree on anything before then. Moreover, the US is also looking into trade with the European Union at the moment. Some analysts speculate that Trump might start another trade war, this time with the EU.
Due to the delay on the Hong Kong bill, the stock markets found enough stimulus to make gains. Nasdaq, Dow, and S&P 500 futures were all up earlier today. The US stock market is also excited about French luxury conglomerate Louis Vuitton buying Tiffany.
Tonight we expect a speech by Federal Reserve Chairman Jerome Powell. The US economy appears stable at the moment, so investors are not expecting any new rate cuts to be announced.
