This Thursday, Wall Street experienced a wave of risk appetite, with stocks rising and bonds falling following the announcement of a trade agreement between Donald Trump and the United Kingdom. Trump called this agreement a "major breakthrough" that will help dismantle trade barriers and expand access to U.S. imports. Additionally, he indicated that if there is progress in negotiations with China, he might consider reducing tariffs.
The Nasdaq 100 rose 1.8% in response to this news, while the S&P 500 increased by 1.3%. Trump expressed optimism about negotiations with China and the possibility of reducing restrictive tariffs, creating a positive climate in the financial markets.
Matt Malley from Miller Tabak + Co commented that clarity on the impact of trade issues between the U.S. and China will provide investors with more confidence about the future of the economy. On the other hand, decreased demand for safe assets caused a decline in gold and safe-haven currencies, while the sale of 30-year bonds affected the market.
The Treasury Secretary and the U.S. Trade Representative are scheduled to meet with a Chinese official in Switzerland to discuss trade in the coming days. Fawad Razaqzada from City Index and Forex.com noted that while there are advances in negotiations, uncertainty and the need for trade agreements with other countries still persist.
In the corporate sector, Apple Inc. is developing new chips for future devices, and IAG SA plans to acquire 787 Dreamliner airplanes from Boeing Co. Warner Bros. also benefited from the new trade agreement between the U.S. and the UK, while Discovery experienced a rise in its stock due to rumors about separating its television networks.
Peloton Interactive Inc. reported a decline in its quarterly revenues, while other companies like Arm Holdings Plc and Shopify Inc. projected challenges in growth and sales respectively. In the cryptocurrency space, Coinbase Global agreed to acquire Deribit, the world's largest Bitcoin and Ether options exchange.
In summary, financial markets have responded positively to the announcement of a trade agreement between the U.S. and the UK, but uncertainty remains regarding negotiations with China and other countries. Investors are closely monitoring events that will mark a possible direction for the global economy.
