Record high stocks pause to gauge the U.S.- China trade outlook and company earnings
LONDON - World stocks eased off record highs on Wednesday and U.S. and German bond yields slipped, as euphoria over a U.S.-China trade deal was tempered by U.S. Treasury Secretary Steven Mnuchin saying tariffs on Chinese goods would remain in place for now.
Dubbed the Phase 1 deal, it may soothe markets which have been on edge as the conflict between the world’s two largest economies hit hundreds of billions of dollars in goods, uprooted supply chains and slowed economic growth. The pan-European STOXX 600 index slipped 0.1%. The retreat was triggered by Mnuchin’s comments that U.S. tariffs on Chinese goods would stay until the completion of a second phase of a U.S.-China trade agreement. Their eventual removal hinged on Beijing’s compliance with the Phase 1 accord, Bloomberg reported, citing sources.
The jittery mood gave a mild boost to safe-haven assets such as gold, with the precious metal ticking up 0.3% after two days of losses. The Japanese yen and high-grade bonds also firmed slightly, though the yen was just a whisker off 7-1/2-month lows of 110.22. Markets are also weighing the potential impact of the U.S. government nearing publication of a rule that would expand its powers to block shipments to China’s Huawei, as it seeks to squeeze the blacklisted firm.
But expectations from the financial sector are higher, especially after JPMorgan posted record profits and Citi beat estimates on Tuesday. Goldman Sachs, Bank of America, BlackRock are among those reporting results later on Wednesday.
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