The Monday Market Minute
- Global stocks trade firmly higher after President Donald Trump delays tariffs on China made goods citing "substantial progress" in trade talks.
- China stocks surge the most in more than three years on the news, but Asia and European stocks notched more modest gains amid caution over the fate of any broader trade agreement.
- Global oil prices drift from early-November highs as last week's EIA data, which showed a record rate of U.S production, offsets trade deal optimism and a broader risk-asset rally.
- U.S. equity futures suggest decent Monday gains on Wall Street, with the S&P 500 called 7 point higher,
Global stocks traded higher Monday after President Donald Trump said he would delay the increase of tariffs on China-made goods, set to kick-in on March 1, following "substantial progress" over two weeks of trade talks between Washington and Beijing.
The President conveyed the message in a series of Sunday Tweets that also suggested he could hold a near-term meeting with President Xi Jinping at his Mar-a-Lago resort in Florida, perhaps as soon as next month, in order to conclude the months-long negotiations.
I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very......— Donald J. Trump (@realDonaldTrump) February 24, 2019
....productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!— Donald J. Trump (@realDonaldTrump) February 24, 2019
The comments following a bizarre exchange in the White House Friday with the President's top trade adviser, Robert Lighthizer, over the nature of contractual agreements and the use of 'memorandums of understanding' as part of the trade agreement process.
The tense moments, captured by television news cameras, once again created the impression that President Trump could unilaterally scupper any hard-won concessions made by negotiators, creating at least some doubt that a full-blow trade agreement is a fait-accompli.
That said, China stocks had one of their strongest sessions in years Monday following news of the postponement, with the Shanghai Composite rising 5.6% to close at the highest level since June 2018 and the tech-focused CSI 300 gained nearly 6%.
Regional stocks were also firmer, with the MSCI ex-Japan index bumping 0.65% higher to a fresh four-and-a-half month high while the Nikkei 225 closed 0.48% to the upside.
U.S. equity futures were marked higher in early European trading, but largely kept the gains in check, with contracts tied to the S&P 500
General Electric (GE) surged more than 11.7% in pre-market trading after it agreed to sell the biopharma portion of its life sciences business to Danaher Corp (DHR) , the firm that GE CEO Larry Culp ran for around 13 years, for $21.4 billion in cash.
Spark Therapeutics Inc. (ONCE) shares were another notably early market mover, rising more than 120% in pre-market trading Monday after the gene therapy specialist agreed to a $4.3 billion takeover by Switzerland-based Roche Holding (RHHBY) , the world's biggest maker of cancer treatments.
European stocks book solid opening two-hour gains on the news, however, led by Germany's trade-sensitive DAX performance index, which added 0.42% on the strength of auto sector and technology stocks and helped the Stoxx 600 benchmark to a 0.30% advance.
Britain's FTSE 100 was marked 0.21% higher, however, as the pound held at 1.3074 amid even more uncertainty after Prime Minister Theresa May postponed a vote in parliament over the fate of the country's Brexit deal -- the third such delay since November -- until March 12, just over two weeks from the time that it is legally obliged to leave the European Union.
Global oil prices turned sharply lower Monday after President Donald Trump targeted OPEC members in a Tweet that cautioned on the impact of higher crude on a fragile world economy.
The Tweet followed another set of fresh three-month highs for oil prices following a jump in global risk assets after the President said he would delay new tariffs on China-made goods, which were set to kick-in on March 1, thanks to what he called "substantial progress in trade talks between Washington and Beijing.
Brent crude contracts for April delivery, the global benchmark, were marked 85 cents lower from their Friday close in New York and changing hands at $66.27 per barrel while WTI contracts for the same month were seen 70 cents lower at $56.56 per barrel.