A rally in global equity markets stalled as China pressed US President Donald Trump to remove recently imposed tariffs.
MSCI’s gauge of global stock markets set a fresh 21-month high before trading flat, and the Nasdaq and Dow Jones industrial average hit new intraday record peaks before U.S. stocks pared gains to trade little changed.
U.S. and European government bond yields climbed, lifted by trade optimism and more upbeat economic data, but China’s push to remove more U.S. tariffs imposed in September as part of a phase one trade deal raised doubts and spurred profit taking. A phase one trade deal is far from certain, said Fawad Razaqzada, technical analyst at FOREX.com in an investor note. So far it has just been promises of a deal underpinning both stocks and the yuan, he said. It is possible that the rally in both markets will at the very least pause.
ISM’s services data showed a reading of 54.7 in October from 52.6 the prior month, or above expectations of 53.4, according to economists polled by Reuters. The data was the latest to allay concerns of a slowdown in the U.S. economy. MSCI’s gauge of stock indexes in 47 countries .MIWD00000PUS shed 0.01% while the pan-European STOXX 600 index of small, mid-sized and large stocks rose 0.10%.
On Wall Street, the Dow Jones Industrial Average .DJI rose 36.03 points, or 0.13%, to 27,498.14. The S&P 500 .SPX lost 1.62 points, or 0.05%, to 3,076.65 and the Nasdaq Composite .IXIC added 5.38 points, or 0.06%, to 8,438.58. In Asia, optimism was helped by the People’s Bank of China’s cut in its a medium-term lending rate, the first since early 2016. It was only a token 5 basis points to 3.25%, but it underscored Beijing’s ongoing desire to support the economy. — VoM