Stocks will look to finish the month of October on a high note as risk appetite continues to increase in the new week. US-China optimism remains the main reason, with market players also not worried about the possibility of Trump tariffs being implemented on November 1. The expectation now is that the US and China will come to an agreement to continue the trade truce after Trump meets Xi Jinping at the weekend.
S&P 500 futures are now up 0.8% following Friday’s strong close to a new record high. And with the excitement in technology, this trend seems to be continuing further this week. Nasdaq futures are currently seen rising by 1.0%.
The US CPI report here last week had further increased the positive expectations on US-China talks. The numbers were lower than anticipated, though one could argue that the details still create a narrow path for the Fed to track. The impact of tariff passthrough remains clear, but in past months it has been less pronounced than many had feared. So, there he is.
But as we look ahead to the week ahead, it’s all about the US-China headlines now. Market players will be hoping for some agreement on the rare earth issue, with tariffs remaining the same as they were before Trump’s latest threats. And perhaps some empty promises, like buying soybeans on trade, were enough to keep Trump and the markets happy but in the end it all turned out to be an illusion once again. A classic of 2019.
