Markets rise as progress on US-China trade talks seen

Markets rose on Friday.

The S&P 500 rose 0.4 percent to close just 0.1 percent below its record high. The STOXX Europe 600 and Nikkei 225 both rose 0.2 percent.

Market sentiment was boosted by comments by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Friday that they have made progress on the first phase of a potential US-China trade deal.

“The price action today is due to expectations of a trade deal with China that may in fact take the December 15 tariffs off the table,” said Alicia Levine, chief strategist, BNY Mellon Investment Management.

However, she added that “if the Dec. 15 tariffs remain, 2020 earnings estimates are at risk”.

Kristina Hooper, chief global market strategist at Invesco, said that in the meantime, progress on trade, upbeat earnings and expectations of another Federal Reserve interest rate cut next week are driving the stock market rally, and “investors are not letting a few high-profile earnings misses dictate their assessment about the facts in general”.