FYI: U.S. stocks lurched higher Thursday after the U.S. and China said they would hold talks in Washington in October, reigniting hopes for an eventual trade truce.
Trade developments between the world’s two biggest economies have spurred big moves across stock, bond and currency markets in recent weeks. The impending talks rekindled hopes for progress after the two countries recently escalated tensions with fresh tariffs.
The S&P 500 jumped 1.30% , continuing its rally from Wednesday. The Dow Jones Industrial Average gained 372 points, or 1.41%. The Nasdaq Composite added 1.75%. The advance for the three major U.S. indexes puts them within striking distance of records hit in July.
The yield on the 10-year Treasury rose to 1.567%, according to Tradeweb, from 1.456% Wednesday. Yields rise as bond prices fall. The advance in Treasury yields helped lift the S&P 500’s financial sector, which was the best performing. Citigroup shares added 3.9%, while Goldman Sachs jumped 2.9%. Meanwhile, utility companies that tend to pay dividends were big decliners.
In Asia, stocks soared on the prospect of fresh negotiations alongside hopes for monetary easing in China. Stocks in Japan and South Korea, both of whose economies have been sensitive to the trade dispute, shot higher, with the Nikkei 225 up 2.1% and the Kospi up 0.8%. The Shanghai Composite rose 1%.
Fresh data released early Thursday added to optimism among investors: Economic activity in the nonmanufacturing sector grew in August for the 115th consecutive month, according to the Institute for Supply Management, helping assuage fears of a recession that have gripped markets in recent months.
Elsewhere, the Stoxx Europe 600 rose 0.7%, while Germany’s DAX and France’s CAC 40 both rose at least 0.8%.
The U.K.’s FTSE 100 slipped 0.5% as the pound climbed against the dollar, with sterling recovering from losses earlier this week on Brexit uncertainty. A weaker pound makes British exports more competitive and boosts the value, in sterling terms, of money earned abroad, said David Madden, a market analyst for CMC Markets. Many components in the U.K. index have substantial international exposure.
One British pound currently buys $1.2344, its highest value since the end of July.
The 10-year German bund yield also crept higher despite weaker-than-expected manufacturing orders data released for July. The data is likely to reinforce expectations for stimulus measures to be announced by the European Central Bank next week. The 10-year bund yield was recently trading at minus-0.623%, up from minus-0.670% on Wednesday. Yields rise when bond prices fall.
In commodities markets, U.S. crude oil rose 1.6% in recent trading. Gold fell 2.2%.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-09-05/your-evening-briefingMarketWatch:
https://www.marketwatch.com/story/dow-futures-rally-more-than-200-points-as-china-us-trade-talks-set-for-early-october-2019-09-05/printWSJ:
https://www.wsj.com/articles/global-stocks-rally-on-new-trade-talks-11567670077Bloomberg:
https://www.bloomberg.com/news/articles/2019-09-04/stocks-in-asia-seen-opening-higher-dollar-slides-markets-wrap?srnd=premiumIBD:
https://www.investors.com/market-trend/stock-market-today/stock-market-closes-sharply-higher-clearing-important-level/CNBC:
https://www.cnbc.com/2019/09/05/dow-futures-jump-as-china-and-us-agree-to-meet-for-trade-talks.htmlReuters:
https://www.reuters.com/article/us-usa-stocks/robust-economic-data-easing-trade-worries-push-wall-street-higher-idUSKCN1VQ1H5U.K:
https://uk.reuters.com/article/uk-europe-stocks/euro-zone-stocks-rally-1-on-trade-hopes-ftse-lags-idUKKCN1VQ0RCEurope:
https://www.cnbc.com/2019/09/05/european-markets-global-trade-and-political-fears-ease.htmlAsia:
https://www.cnbc.com/2019/09/05/asia-markets-september-5-hong-kong-extradition-bill-brexit-currencies.htmlBonds:
https://www.cnbc.com/2019/09/05/us-bonds-treasury-yields-higher-after-us-china-trade-talk-boosts-sentiment.htmlCurrencies:
https://www.cnbc.com/2019/09/05/forex-markets-brexit-geopolitics-in-focus.htmlOil:
https://www.cnbc.com/2019/09/05/oil-markets-us-crude-stockpiles-in-focus.htmlGold:
https://www.cnbc.com/2019/09/05/gold-markets-us-china-trade-talks-in-focus.htmlWSJ: Markets At A Glance:
https://markets.wsj.com/usMajor ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitorSPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-trackerSPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectorsCurrent Futures:
https://finviz.com/futures.ashx 
