- Jonathan Ernst/Reuters
- Global equities paused for thought Thursday after a lack of fresh positivity around the US-China trade war weighed on markets.
- The first three days of the week saw strong gains for stocks around the world, but sentiment was more muted Thursday.
- Investors are concerned that a deal may not be reached if the US doesn’t amend its plans to keep tariffs on China, a move designed to ensure Beijing complies with any agreement between the two countries.
- More worrying data out of Germany dampened sentiment in Europe, while US futures were pointing down.
Stock markets paused for thought Thursday as investors mulled a lack of fresh impetus in the US-China trade talks.
The first three days of the week saw strong gains for stocks around the world, but sentiment was more muted Thursday as investors awaited more concrete news from the talks.
There have been suggestions that the US will keep punitive tariffs on China to ensure it keeps up its side of any agreement, according to The Wall Street Journal. Trump previously described himself as “Tariff Man,” with traders wary of the president’s trade threats.
The White House economic adviser Larry Kudlow told reporters Wednesday that “we’re not there and we hope this week to get closer,” Bloomberg reported.
Bloomberg has also cited unnamed sources familiar with the talks as indicating that the US could give China until 2025 to meet its obligations surrounding agreed commodity purchases, such as soybeans, and the ability of American firms to wholly own businesses in the country.
“Arguably China-US trade dispute is the strongest headwind for the markets to tack, so this trade agreement should continue to provide a substantial boost to investor sentiment ‘if’ both sides can agree on the final pieces of this intricate puzzle,” according to Stephen Innes, the head of trading and market strategy at SPI Asset Management.
China’s benchmark index, the Shanghai Composite, closed up 0.9% on Thursday, while Japan’s Nikkei was flat.
Europe was in the red, with weak German industrial data continuing to hurt sentiment on the continent after factory orders plunged. The DAX was down 0.15% and the FTSE 100 was down 0.6% as of 9:55 a.m. in London (4:55 a.m. ET).
US futures were pointing down, with the Nasdaq and the S&P 500 trading lower, though the Dow Jones Industrial Average was up slightly. Investors will be hoping the S&P 500 can continue to gain Thursday after five straight positive days, its best streak in two months.