The Concordiensis

Economic effects caused by President Trump’s tariffs del

Kane Jaklitsch, Columnist

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U.S. shares opened higher Monday, while Chinese stock indexes saw their largest daily gains in years, after President Trump declared that he would delay an increase in tariffs on Chinese goods.

The scheduled tariff increase on $200 billion of Chinese goods from 10 percent to 25 percent was supposed to be on this Saturday, but Trump cites “substantial progress” on issues including intellectual property and technology transfer after the weekend, and that he hopes to meet next month with Chinese leader Xi Jinping to complete a trade agreement.

The news has given investors a sigh of relief as U.S.-China trade talks have been looming over the economy for a year and have caused volatility in the markets when uncertainty about the future arises.

The Dow Jones Industrial Average rose 167 points, or 0.6 percent, to 26,199 shortly after the opening bell. The S&P 500 added 0.5 percent and the Nasdaq Composite climbed 0.8 percent.

The benchmark Shanghai Composite Index rose 5.6 percent to an eight-month high. The smaller Shenzhen Composite also had its best day since 2015.

The moves put both indexes back into bull market terrain, which is when stocks rise 20 percent or more from a low on a closing basis.

Commodities also gained slightly Monday, as the Chinese yuan touched a seven-month high and other commodity-linked currencies like the Australian and New Zealand dollars gained on Monday after Trump’s decision.

Copper prices stayed between small gains and losses on Monday, which was around their highest level since early July. Copper for the upcoming month, was down 0.1 percent at $2.95 a pound on the Comex division of the New York Mercantile Exchange.

However, prices have risen about 12 percent for the year, boosted by hopes that a trade agreement will improve the outlook for global growth and increase demand for materials used in manufacturing and construction, though they are still roughly 11 percent below their four-year highs.

European currencies were stronger with the euro reaching $1.1359, compared with $1.1335 late Friday. The British pound was gained to $1.3080, versus $1.3055.

The yield on the 10-year Treasury note fell 3.1 basis points to 2.658 percent, while the 2-year Treasury note yield slipped 2.9 basis points to 2.495 percent. The 30-year Treasury bond yield fell 2.8 basis points to 3.014 percent.

Oil prices fell from three-month highs on Monday after Trump warned that crude oil prices are getting too high and could hurt the global economy. West Texas Intermediate futures fell 2 percent to $56.11 a barrel on the New York Mercantile Exchange.

WTI ended Friday at $57.26 a barrel, its highest closing price since Nov. 12. Brent crude slid 2.1 percent to $65.74 a barrel on London’s Intercontinental Exchange.

In the week ahead, investors will be watching for February consumer confidence due Tuesday, pending home sales index and Jerome Powell’s testimony on Wednesday, fourth quarter gross domestic product growth estimates and weekly jobless claims on Thursday and December core inflation and February Consumer sentiment index on Friday

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Economic effects caused by President Trump’s tariffs del