Why did US stocks recover? in the middle of trade war? | Economy | world


The actions listed in the various indexes of Wall Street they recovered solidly on Tuesday 14 May, after having recorded losses in recent weeks due to the trade war between United States is porcelain.

the Dow Jones, index of industrial companies, rose 1.24% and closed with a rise of 0.82%, after having had the worst day since 3 January this Monday 13 May. the S & P 500, which includes the capitalization of 500 large companies, increased by 1.2% and closed at 0.80%, and the Nasdaq, of technology companies, increased by 1.4% and closed the day at 1.14%.

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According to international agencies AFP and Reuters, These gains were extended following comments from President Donald Trump, who called trade tensions with China a "small struggle" between economic powers and assured the press that a trade agreement could still take place.

Luis Eduardo Falen, senior analyst at Inteligo Research SAB, said that much of the rebound in the US market is also due to optimism a possible meeting between Donald Trump and Xi Jinping, his Chinese counterpart, at the next G-20 summit (June), in which an agreement will be concluded.

"All the indices, both from the United States and Europe, have rebounded and China has already assured that it will continue to negotiate with the United States," said Falen.

As you remember, global stock markets closed in red on May 13 after China announced, for June 1st the application of new tariffs to a new list of US products for US $ 60,000 million. Xi Jinping's administration revealed the rates in retaliation for additional US tariffs on Chinese imports of US $ 200,000 million, which entered into force on Friday 10 May.

Tensions have intensified for more than a week. Roberto Melzi, vice president of investments of AFP Integra, explained that the negotiation between the two economic powers is long-winded and "Very sensitive for the countries" not only in economic terms, but also geopolitical.

Melzi pointed out that in this tense scenario, the Dow fell 4.8% between April 30 and May 13 and the S & P 500 fell 4.5% in the same period. "The fall was strong and fast in a scenario in which the comments of both countries are present. It was thought that the situation (of the trade war) was almost resolved, and it was not," he added.

For Melzi, in addition to announcements on the G-20 meeting, the increase in markets was due to the fact that investors who have sold shares on the downside of stock markets are recovering profits on the cards sold, taking advantage of the period to buy down. This context has aroused the appetite of investors who previously saw high prices to enter the market.

According to CNN, the recovery shows that the US market is very good and corporate earnings are strong enough to continue to attract capital.

"Although for Wall Street He did not like the escalation of tensions between China and the United States in the last few days, because a trade war would have been negative for everyone, it would have been the least serious thing for the United States, "the media said.

However, Melzi explained that nothing guarantees that in the coming days there will be negative news that will prevent Wall Street's actions from recovering the levels they had before May in the short term.

"There is uncertainty and this should be sufficient so that the market, in the absence of a possible agreement, does not increase so rapidly. The stock markets should not rise unless it is guaranteed that the situation has actually improved between the countries," he said. He said.

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