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Home / Business / Shares rally as Trump announces optimism and China digs in

Shares rally as Trump announces optimism and China digs in



Investors desperate for good news on trade and global economic growth are in luck.

Over the weekend, Trump downplayed the concern that the US economy is declining, saying that China and the US are "talking!" [19659003] Meanwhile, China announced a change in the interest rate system to give the struggling corporate sector more support. The move "[opens] opens the door for potential interest rate reductions and should immediately give a bail to Chinese companies," said Stephen Innes, managing partner of Valor Markets.

The result: Global markets pushed higher, led by Hong Kong Hang Seng.

This does not mean that last week's volatility should be set aside. Trump suggested a trade deal that would eliminate billions of dollars in goods remains elusive. "China would like to make a deal," he told reporters Sunday. "I'm not ready."

Another red flag: Trump also threw cold water on the notion that Chinese technology company Huawei could be released from the hook. It is an important barrier to relieving tension between Washington and Beijing, which sees Huawei as a national champion.

"I don't want to do business [with Huawei] at all because it is a threat to national security," Trump said. There are reports that the US Department of Commerce could extend a temporary license allowing US companies to sell components to Huawei despite the US export ban.

  Asian markets bounce on hope for Chinese stimulus

Stocks could show resilience this week in hopes that Jerome Powell, Federal Reserve chairman will preview the Fed's decision in September when central bankers gather for a summit in Jackson Hole. But there is reason to be skeptical that central banks can save the beef market at this time.

Global slowdown comes to dividend

Dividend paid to global shareholders hit a record $ 513.8 billion in the second quarter. But the rate of growth was the slowest in more than two years, according to a new report from Janus Henderson, an asset management firm.

"The slowdown in the world economy and its associated impact on corporate profits has begun to impact dividends," the report states.

More: "Underlying [dividend] growth of 4.6% is objectively good, but is nonetheless weaker than growth over the last couple of years."

In the United States, the largest contributor to growth came from the banking sector.

Remember: I wrote last week that JPMorgan predicts stock buybacks peaked for the cycle in 2018. Shareholders who used to reap big rewards may be in for an adjustment.

Future

Estee Lauder ( EL ) and Weibo ( WB ) Revenue Reports before the US markets open. Baidu ( BIDU ) will follow after the markets close.

Coming tomorrow: More revenue in litigation can shed light on US consumer spending. Home Depot, Kohl's, TJX and Urban Outfitters will share results.

Coming Wednesday: Can Target ( TGT ) mirror Walmart's strong performance?

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