Trump approves US-China trade deal

Trump approves US-China trade deal

China will increase imports from the US and other countries, Wang said at a briefing in Beijing Friday.

The phase one of the agreement would involve the reduction of tariffs by the U.S. in exchange for China increasing its purchases of agricultural products from the United States to between $40,000 and $50,000 million, according to experts and local media.

Confidence the trade war would be settled has also pushed the S&P 500 up 26% in 2019 and fueled a 43% rally in the information technology sub-index.

The S&P index recorded 73 new 52-week highs and one new low, while the Nasdaq recorded 147 new highs and 28 new lows.

The office of the us trade representative in a statement said the two countries "reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China's economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange".

Sen. John Cornyn, R-Texas, said he was "cautiously optimistic that the suspension of Sunday's planned tariff hikes and reduction on existing tariffs will provide needed stability for our economy, especially our businesses and agricultural producers in Texas". Chinese officials said they would like the discretion to buy based on market conditions.

UPDATE 10:30 a.m. ET - China has now announced it has agreed to an initial deal with the U.S.

"The Street has been laser focused on this additional 15% next round of tariffs and we believe this ultimately signals a green light for tech stocks heading into year end with the impending $160 billion tariff no longer a near-term concern", Wedbush analyst Dan Ives wrote in a note on Friday. He also said some of the prior duties on $120 billion worth of Chinese imports will be rolled back.

"Trump single-handedly took down the USA economy with tariffs that killed 300,000 jobs, and this deal doesn't commit China to any serious structural reforms". China has also pledged to make sizeable agriculture and services purchases while the United States agreed to significant changes to Section 301 tariffs.

Data on Thursday showed the number of Americans filing applications for unemployment benefits jumped to more than a two-year high last week, while another report showed US producer prices were unexpectedly unchanged in November.

USA stocks rose to records earlier Thursday as optimism grew that there would be a deal.

However, China remained awfully quiet after news of the agreement broke.

Chinese officials and trade experts have warned that another exchange of tariffs could torpedo the trade negotiations and further escalate the dispute.

With a more wealthy middle class, more Chinese have greater expectations of diverse, affordable and convenient consumer products, and China looks forward to expanding its import of high-quality USA goods and services in areas such as manufactured goods, food, medical care and finance, said Mr Ning Jizhe, vice-chairman of the National Development and Reform Commission, China's state planner. "Thank you!" President Trump said.

United States stocks hit a fresh record on hopes there will be a continued softening of trade tensions between the world's two largest economies.

I'm not sure that's a risk I find worth keeping into the market close given how unpredictable things can be when it comes to Trump and the trade war.

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