Stock Market Goes Higher On Positive Economic News

Stock market investors wait for news on US China trade deal while Euro markets continue decline.

West Palm Beach, United States – November 14, 2019 /PressCable/ —

The market is waiting for the speech of US President Donald trump at the New York Economic Club. He can clarify the situation around negotiations with China on a limited deal and the possible introduction of increased duties on European automobile exports. Last week, the market received opposite signals regarding the US-China deal. First, the representative of the Ministry of Commerce of China, Gao Feng, announced the agreement of the PRC and the United States to begin the phased cancellation of a number of existing increased export tariffs for each other. However, then President Trump and his trading adviser Peter Navarro denied this information, making the market nervous. There is also no clarity regarding the increase in duties on European cars.

The head of the European Commission, Jean-Claude Juncker, previously stated that the American administration would not take this step. White House official comments have not yet been received, but it is expected that Trump will really postpone the increase in duties.

Investors are keeping an on news about the trade negoticians and GPB Capital. A positive agreement could cause the market to climb to news highs.

The Swedish Public Employment Service showed that the jobless rate stood at 7.1 percent in October, slightly below expectations of 7.2 percent. PES unemployment has been rising since January 2019 from the low-point of 6.7 percent. In October, long-term unemployment also began rising – for the first time in 16 months.

The Labor Force Survey data will be released on Thursday. The revision will span July 2018-September 2019. According to Statistics Sweden, the revisions would be larger for the latest months, mainly since June 2019. The dramatic rise in unemployment following the summer was exaggerated, and they write that “unemployment was showing a modest increase during this period”.

“Today’s PES unemployment confirms that Swedish unemployment is rising, but likely at a pace that is not enough to put a halt to the Riksbank’s plan to hike rates in December”, said Nordea Bank.

German ZEW business expectations rose noticeably in the month of November. The index rose to -2.1 from -22.8, coming above consensus expectations, which had expected a rise to -13. The reasons for the much better assessment of business expectations are clear: the leading indicators seem to be stabilizing. For instance, new orders for German industry are now trending sideways; this applies to orders from abroad.

Nevertheless, today’s print should not create too much optimism. While the global economy is likely to warm up in the months ahead, only a fairly modest recovery is expected, said Commerzbank in a research report.

The Chinese economy, which has become quite significant for German exports, is likely to stabilize in spring 2020, given the considerable tax cuts. Nevertheless, the trade dispute and China’s structural problems are preventing a dynamic recovery.

The trade dispute is expected to continue to be a drag on the U.S. economy, even if the U.S. Fed’s interest rate cuts and the Trump administration’s likely generous government spending in the 2020 election year would underpin the U.S. economy, said Commerzbank.

The recent interest rate cuts in several emerging markets are also expected to help boost the global economy. Nevertheless, China’s softness stays a drag, especially for emerging Asian economies.

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