Hopes of a ceasefire in the trade war between Washington and Beijing are boosting stocks
- Introduction: Talks conclude after three days
- China: We’re serious about a deal
- US: Talks went just fine
- Stocks jump 1% in Asia… up in Europe too
- Markets are ‘climbing out of a hole’
After three hours of trading, the FTSE 100 is sitting comfortably higher at 6,962 points, up 66 points or almost 1%.
That’s its highest level since 5th December 2018, clawing back the heavy losses suffered late last yet (when the Footsie hit a 28-month low of 6,536).
Equities are rallying on optimism that the US-China trade dispute might be resolved. A scheduled two days of negotiation was extended by a third day, suggesting things are going well. The arrival of US officials from energy, agriculture and treasury departments is a good sign that discussions are becoming more explicit on topics such as intellectual property and trade deficit.
The next step will come at the 2019 World Economic Forum in Davos (22 January), where US President Donald Trump and China Vice-President Wang Qishan will meet.
Some good news: unemployment in the euro area has hit a new 10-year low.
The jobless rate dipped to 7.9% in November, down from 8.0% in October 2018 and from 8.7% in November 2017.
Among the Member States, the lowest unemployment rates in November 2018 were recorded in Czechia (1.9%), Germany (3.3%) and the Netherlands (3.5%). The highest unemployment rates were observed in Greece (18.6% in September 2018) and Spain (14.7%).
Compared with a year ago, the unemployment rate fell in all Member States except Estonia where it remained stable. The largest decreases were registered in Croatia (from 10.0% to 7.8%), Greece (from 20.8% to 18.6% between September 2017 and September 2018) and Spain (from 16.5% to 14.7%).
Newsflash: Sales of cars in China fell last year, for the first time in at least 20 years.
#CHINA DEC. RETAIL PASSENGER VEHICLE SALES -19% ON YEAR: PCA – BBG
*CHINA 2018 RETAIL PASSENGER VEHICLE SALES FALL 6.0% ON YEAR
*CHINA CAR SALES HAVE FIRST ANNUAL DROP IN MORE THAN 2 DECADES
UK baker chain Greggs is among the top risers in London, up 7.5%, after posting sparkling results.
Greggs has prided itself on adapting products to suit changing consumer tastes, and said its latest creation, the £1 vegan sausage roll, was proving popular with “a broad range of customers”.
The vegan sausage roll hit Greggs’ shelves last week, coinciding with the beginning of Veganuary, a growing movement that encourages people to embrace plant-based diets during January. It is on sale in 950 of Greggs’s 1,950 UK shops.
I have written a poem. pic.twitter.com/aofQPf6HWT
Markets are doing their best to climb out of the hole they tumbled into late last year, says Russ Mould, investment director at AJ Bell.
The blue chip FTSE 100 index is up 2.6% year-to-date which sends hope to investors that market weakness seen in the second half of 2018 may not necessarily turn into a sustained downward trend.
“Housebuilders, tobacco, miners, engineers and retailers all look strong on the London market on Wednesday. The rest of Europe and Asia also pushed ahead, following similar strength on the US market last night.
UK housebuilder Taylor Wimpey is the top riser on the FTSE 100 this morning, up over 5%.
It reassured the City this morning that business looks solid, saying:
“We continue to see solid forward sales indicators and start the year with a very strong order book.
Shares in European car makers are jumping, with Daimler up 3%, Volkswagen, up 2.75% and BMW up 2%.
They’ve all suffered from recent US-China tensions; last month, China reportedly began cutting tariffs on American-built cars.
President Trump is desperate to strike a trade deal with China to drive stocks up again, Bloomberg reports.
According to people familiar with the matter, Trump’s willingness to cut a deal with Beijing is driven in large part by his desire for markets to rally.
He publicly said he’s eager to make a deal that benefits both sides while also stressing that China’s slowing economy and falling stock market signal the country is more desperate than the U.S. for a speedy outcome.
Today’s rally has driven the FTSE 100 to a four-week high, clawing back December’s losses.
Trade deal hopes have sent European stocks higher in early trading.
In London, the FTSE 100 index of top blue-chip shares is up 45 points (0.7%), and there are similar gains in Paris and Frankfurt.
US officials have also confirmed that the trade negotiations with China are concluding…..and even hinted that they went well.
The U.S. trade delegation in Beijing is wrapping up meetings with Chinese officials and will return to the United States later on Wednesday, a U.S. official said.
Ted McKinney, U.S. Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs, made the comments to reporters at the delegation’s hotel.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Hopes of a trade agreement between the US and China are gripping the markets today.
China’s Foreign Ministry: trade talks in Beijing have concluded and the results will be released soon
Midlevel trade talks between the United States and China, which had been extended into a third day, have ended.
Markets have more sugar hits to cheer overnight, helping equities claw back more of their December losses.
Reports that China is planning fresh measures to boost domestic consumption have sent shares in large Chinese carmakers and appliance manufacturers higher, though details are scarce.
Asia stocks continue to rise, for a 10th day in 11, thx to trade deal optimism, dovish Powell, China stimulus & last year’s excessive falls. ‘Risk-on has started looking a tad too easy,’ BBG’s Vishnoi says. Dollar slips, Euro at $1.1456, US 10y at 2.72%, Oil climbs, Bitcoin >$4k. pic.twitter.com/gBd78T3C4y