As the United States and China are in the final stages of completing a historic trade deal, the stock markets roared on Monday.
As noted by Business Insider, China has offered to dramatically lower tariffs and other restrictions on American farm, chemical, auto and other products in exchange for the U.S. removing several of the sanctions the Trump administration levied against Chinese products since last year.
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The agreement could be finalized in the coming weeks and may result in hundreds of billions of dollars being poured into the U.S. economy.
Following the reports, stocks surged on Monday and are in the green.
“Reports over the weekend signal that the two sides are moving rather more rapidly to a deal than we maybe thought,” wrote markets analyst Neil Wilson.
“But with all this positivity comes the risk that the market is buying on this rumor mill and is becoming more exposed should the good news not materialize.”
Here’s more from Business Insider on the markets soaring amid reports of a U.S.-China deal close to being finalized:
US futures jumped on the news, with those underlying the S&P 500, the Dow, and the Nasdaq all rising at least 0.4% as of 8:50 a.m. in London (3:50 a.m. in ET).
China’s benchmark, the Shanghai Composite Index, gained 1.1%; Japan’s Nikkei added 1%; and the Hang Seng in Hong Kong rose 0.5%.
In Europe, the broad Euro Stoxx 50, Germany’s Dax, and the UK’s FTSE 100 all increased at least 0.3%.
— ABC News (@ABC) 4 марта 2019 г.
Below is a clip from Yahoo Finance explaining the jump in the stock market amid the possible deal:
Highlight: Reports of a potential China trade deal is what’s «fueling the futures markets here,» @seanansmith says from the @NYSE. «Crude is getting a boost on the heels of this trade deal news. … A lot of the global slowdown concerns could be absolved.» https://t.co/Jb7k9twFHf pic.twitter.com/jcHtLrM89f
— Yahoo Finance (@YahooFinance) 4 марта 2019 г.
Late last week, the Chinese government announced plans to unveil a proposal where they would purchase $30 billion in certain products such as soybeans and corn.
This proposal came in response to a potential negotiation between the United States and China.
Here’s more from Bloomberg:
“China will say what needs to be said to get a deal, but the key component will be in the verification and enforcement,” Arlan Suderman, chief commodities economist for INTL FCStone, said in a note. “I remain skeptical that such a deal will ‘fix’ the soybean balance sheet, without specific very large purchase quotas that I do not expect. However, it would not require very large purchase of corn, ethanol and DDGS to significantly improve the corn balance sheet.”
It’s more than clear that substantial progress has been made between the United States and China on trade.
Experts argue that if a deal is reached, it would result in hundreds of billions of dollars being poured into the U.S. economy.
That would help create thousands of new jobs in America and further ignite the already booming economy.
The Trump Effect is very real, and the United States has the hottest economy in the world because of the president.