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US close: Stocks close higher ahead of trade deal signing

By Iain Gilbert

Date: Monday 13 Jan 2020

US close: Stocks close higher ahead of trade deal signing

(Sharecast News) - Wall Street stocks closed higher on Monday as market participants cheered news that the US would be removing China from a list of currency manipulators ahead of the pair's "phase one" trade deal later in the week.
At the close, the Dow Jones Industrial Average was up 0.29% at 28,907.05, while the S&P 500 was 0.70% stronger at 3,288.13 and the Nasdaq Composite was 1.04% firmer at 9,273.93.

The Dow closed 83.28 points higher on Monday after seeing out last week in the red despite briefly breaking the psychologically-important 29,000 point level earlier in the session as a disappointing jobs report weighed on sentiment.

Sentiment was boosted after the US announced it would be removing China from a list of currency manipulating countries, raising optimism ahead of the agreement. The decision to take China out of the currency manipulator list came over five months after the country was added to it.

A trade delegation from Beijing were set to travel to Washington on Monday before inking the pair's "phase one" trade deal on Wednesday. While the deal will reportedly lower tarrifs and increase Chinese purchases of US agricultural products, no official details have been released as of yet.

The Wall Street Journal reported that the US and China had also agreed to hold semiannual talks aimed at resolving disputes and pushing for reforms and the South China Morning Post said that the Chinese government had stated that the trade war was "not over yet".'s Neil Wilson said: "The US-China trade deal is the focal point. White House officials are adamant it's a fait accompli, save translating the 86-page document into Chinese. It's expected to be signed on Wednesday.

"With the phase one deal baked in, what markets want to know is how quickly - if at all - the two sides can move things forward to phase 2. There's no doubt that building on this deal is going to take a lot more effort and compromise. Of course, phase one could unravel at any moment if either side wants to walk."

In corporate news, Shaw Communications shares were down 0.15% after revealing first-quarter earnings had dipped even as wireless revenue climbed, while Tesla shares closed 9.77% higher after analysts at Oppenheimer hiked their target price on the firm from $385 each to $612.

On the data front, the US budget deficit widened to $356.6bn during the first three months of fiscal 2020, with spending rising more than revenue to keep the federal shortfall on pace to exceed $1trn by year-end.

The gap increased 11.8% from October to December, according to the Treasury Department's monthly budget report. Government outlays grew by 6.7%, while receipts rose 4.6%.


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