Monday 23 September 2019

Trade and Brexit hopes lift markets

Traders work on the floor of the New York Stock Exchange (NYSE). Photo: Reuters
Traders work on the floor of the New York Stock Exchange (NYSE). Photo: Reuters


US stocks gained in early trading yesterday as hopes rose for progress in the American-Chinese trade dispute and technology shares bounced back from Monday's rout. The pound rallied on reports of advancement toward a Brexit deal.

The S&P 500 advanced after White House economic adviser Larry Kudlow told CNBC that the US and China were talking on "all levels" of government.

That followed an overnight report that China's vice-premier Liu He will pave the way for a meeting between the leaders of the two biggest economies later this month.

Britain's pound pared losses from the past three days after UK Prime Minister Theresa May said talks with the European Union were in the "endgame" and data showed UK wage growth has accelerated.

"This is certainly an achievement of sorts and no one can be under any illusion about how hard it has been to get to this position," said Stephanie Kelly, political economist at Aberdeen Standard Investments.

"But we are not at an end stage yet. The devil will be in the detail of the Irish Border issue. Everything hangs on that and ultimately whether Theresa May can get this past Parliament."

Trade worries and Brexit negotiations have hung over markets for months, clouding the economic outlook and helping compound an ongoing sell-off in equities.

While comments from Chinese Premier Li Keqiang in Singapore yesterday hinted at a more optimistic outlook, sentiment overall remains fragile as the Federal Reserve pursues its path of policy normalisation and tech companies slide.

Irish Independent

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