The U.S. and China have reached a phase one trade deal in principle.
The news sent stocks soaring — the S&P 500 and Nasdaq both closed at records.
Three experts weigh in.
Steve Grasso, CNBC market analyst, says this is a boon for Wall Street bulls.
“The day started out just being about tariffs, and no one was thinking about the deal. People could see the deal within eyeshot. We’ve heard a bunch of tweets that have resulted in nothing after a couple of days in the past and now we see this coupled with the tariffs that were the existing ones coming off, no new ones coming on, huge tailwind for the market. And if a deal is done now there’s not a whole lot to hang your hat on if you’re a bear, at least going into year-end, and that’s why we saw the pop we just did.”
Stephanie Link, head of global equities research at Nuveen, assesses the progress made in the market environment over the past year.
“What a difference a year makes. That’s all I have to say. Last year we had tight Fed policy and we had no idea what was going to happen with trade. This year, we have a much more accommodative Fed and it seems like we’re getting some pieces of certainty on trade. It may not be what we want, but it’s making progress. Now, I would argue a lot of this is already priced into the market given that we’ve had such market expansion on the multiple.”
Gabriela Santos, global market strategist at J.P. Morgan Asset Management, says this news is welcome relief after a long wait.
“We’ve been waiting for this for two months, since Oct. 11. I have that memory, a very clear timeline. We all do, we all do. So we’ve been waiting for this for a while. There was some sort of already consensus that the Dec. 15 tariffs would indeed get pushed back. I think we’ve got the market a little bit excited here in the middle of the day with the possibility for some upside surprise — the removal of existing tariffs. So let’s see; we’ll have to wait and see. But that would be a significant upside surprise.”
