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US Sues Southern California Edison for Saddleridge Wildfire
The U.S. Government sued Southern California Edison for helping restore National Forest System land burned in the Saddleridge Wildfire near Los Angeles, in 2019. The lawsuit filed on Tuesday seeks damages to cover fire suppression and rehabilitation costs arising from Edison International's alleged negligence and trespassing by fire, as well as violations of California's public safety laws. Southern California Edison's spokesperson Gabriela Ornelas stated in a press release that the utility will review the complaint and respond via the legal process. The utility expressed its sympathy to the victims of fires. According to the Department of Justice, the Saddleridge Fire began at the base of an transmission tower near Sylmar in California during high winds after a powerline attached to another tower nearby fell on a steel arm, causing an electrical fault. According to a complaint filed at the Los Angeles federal courts, the fire on October 10, 2019, burned approximately 800 acres (324 ha) in the Angeles National Forest. It also damaged neighboring communities, and caused one death. Cal Fire reported that the Saddleridge Fire had burned 8,799 hectares (3,561 acres) in total. The government claimed that Southern California Edison was "aware of the potential dangers posed by high wind" and had failed to maintain its transmission lines, power lines, and other equipment. The government filed the lawsuit five weeks after it sued Southern California Edison for blaming their equipment for igniting the Eaton Fire and Fairview Fire of September 2022. The January wildfires, which included the Palisades Fire and Eaton Fire in Southern California, caused 31 deaths and damaged or destroyed more than 16,000 buildings. U.S. v. Southern California Edison Co et al. U.S. District Court Central District of California No. 25-09547. Reporting by Jonathan Stempel, New York; editing by Matthew Lewis
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Gold futures reach $4,000/oz; S&P 500 closes lower than recent records
The major stock indexes declined on Tuesday. The S&P 500 ended lower after recent records highs. Investors were looking at political turmoil in France, Japan, and the U.S. shutdown. Gold futures also hit $4,000 per ounce for the very first time. The demand for gold as a safe haven has been driven by the uncertainty surrounding the U.S. shutdown and expectations of another U.S. rate cut. U.S. Gold futures for delivery in December settled at $4,004.4. This is a 0.7% increase. It is the seventh day of the shutdown. The euro dropped against the U.S. Dollar for the second day, as investors awaited the developments in France. On Monday, the shocking resignation of Sebastien lecornu raised concerns over the fiscal outlook of the country. Tesla shares weighed on the S&P 500 & Nasdaq on Tuesday after the company announced more affordable versions its best-selling Model Y & Model 3 SUVs and sedans. The electric-vehicle manufacturer is trying to reverse declining sales and waning share of the market. Consumer discretionary fell 1.4%, leading all S&P 500 sector declines. The Federal Reserve is expected to cut rates and artificial intelligence will be a major factor in the future of the U.S. economy. Jake Dollarhide is the chief executive officer at Longbow Asset Management, located in Tulsa. "Are those nervous Nellies in gold right or is the AI trading correct?" This is what we will find out over the coming weeks and months. The Dow Jones Industrial Average dropped 91.99 points or 0.20% to 46,602.98, while the S&P 500 declined 25.69 points or 0.38% to 6,714.59, and the Nasdaq Composite was down 153.30 or 0.67% to 22,788.36. Tesla shares closed 4.4% lower. If you take a look at the stock price of Tesla since April 2, this is a complete U turn. Art Hogan is the chief market strategist of B. Riley Wealth, New York. IBM shares rose 1.5% among gainers after the company announced its partnership with AI startup Anthropic. The MSCI index of global stocks fell 3.93 points or 0.39% to 992.13. The pan-European STOXX 600 fell by 0.17%. The blue-chip French stocks lost their gains and closed flat on Tuesday after Monday's sharp selloff triggered by Lecornu’s abrupt resignation. Emmanuel Macron, France's president, was under increasing pressure to resign and/or call a snap parliamentary vote to end the political turmoil which has seen five prime ministers resign in less than two year. Lecornu held a last-ditch meeting to form a government on Tuesday. The yield on French bonds rose by 2 basis points, to 3.59%. Investors in Japan snapped up government debt in a sign that they were easing their nerves after Sanae Takaichi was elected as the leader of the ruling Party. Takaichi is a supporter of low interest rates and large spending. This led to a selloff of domestic bonds, the currency, and sent stocks to new highs. The Japanese yen fell 1.05% to 151.95 dollars, while the euro dropped 0.47% to $1.1655. Investors remained confident that the Fed would cut rates during its next meeting, which is why benchmark U.S. yields dipped. The yield on the benchmark 10-year U.S. notes dropped 3.5 basis points, to 4.127% from 4.162% at late Monday. Investors have been forced to rely on independent data and remarks by monetary policymakers to gauge the Fed's potential rate cuts. A New York Federal Reserve Bank survey showed softening labor market expectations among consumers. Prices of oil were not much different. A smaller-than-expected increase to OPEC+ output in November was offset by signs of a possible supply glut. U.S. crude oil rose by 4 cents, settling at $61.73 per barrel. Brent dropped 2 cents, settling at $65.45.
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Gold ETFs are a hot commodity as the metal's prices smash records
Analysts said that massive flows into exchange traded funds tracking gold helped to drive a spectacular rally which pushed bullion prices to record highs in the last month. On Tuesday, spot gold prices reached a new record of $3.990.85 an ounce, while U.S. futures gold for December delivery surpassed the $4,000 per ounce mark. Analysts cited the record rate at which investors were allocating money into the metal via ETFs. Investors are becoming more cautious about the sky-high stock prices and view gold as a refuge against uncertain geopolitical and economic policies. According to LSEG, gold prices have risen 51% this year. This is the biggest increase since 1979. Roukaya Ibrahim is a commodities strategist with BCA Research. She calculated that global assets in gold ETFs now account for 2,6% of total assets, up from 1,9% one year ago. Ibrahim said that the intensity of investor interests is unprecedented. Clients now talk to her for up to 90 minutes at a stretch about market movement. State Street Investment Management reported that inflows to U.S. exchange-traded funds (ETFs) such as its own SPDR gold shares had reached all-time highs of $35 billion by the end of September. This is a record-breaking amount, surpassing the previous annual record of $29 Billion, set in 2020. According to World Gold Council data, global inflows of gold ETFs have reached $64 billion for the year. This includes $17.3 billion, a new record, in September. The World Gold Council has calculated that gold ETFs saw outflows of $23 billion over the past four years. Analysts believe that gold's value can be maintained despite economic policy headwinds, and the rising geopolitical tensions. Gold can also cushion any gains made this year, as stocks have soared due to the artificial intelligence boom. Gold is a hedge to protect against the failure of AI-driven tech booms to deliver and policy implications in the event of a crash, said Thierry Wizman. David Schlesser is the head of VanEck's multi-asset solution. He said that gold, one of financial assets oldest in history, has been rising along with bitcoin. Schlesser said that both assets are not linked to any government. Schlesser says that "nothing goes up straight and we can expect some tactical pullbacks or volatility," and that volatility is "your friend" in this situation, giving traders and investors a chance for a quick entry on dips. He believes that gold prices will top $5,000 per ounce by 2026, and he urges investors not to invest less than 5% of their assets in gold. Goldman Sachs stated in a Monday note that it anticipates the holdings of Gold ETFs to continue increasing in North America, Europe and beyond as the Federal Reserve continues to lower U.S. rates until 2026. Mike Wilson, Morgan Stanley's chief investment officer, suggested that a 20% gold allocation is a good inflation hedge. Adrian Ash, BullionVault's head of research, said: "When established names like Morgan Stanley tell investors they don't have enough gold, there's no wonder that inflows into ETFs and vaulted bullion are on the rise." (Reporting and editing by Megan Davies, David Gregorio and Poline Devtt)
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Gold futures reach $4,000/oz; S&P 500 declines after recent record highs
The major stock indexes declined on Tuesday. The S&P 500 eased after recent record-highs. Investors were looking at political turmoil in France, Japan, and the U.S. shutdown. Gold futures also hit $4,000 per ounce for the very first time. Demand for Safe-haven The uncertainty surrounding the U.S. government shutdown and expectations of another U.S. rate cut have contributed to this increase. U.S. Gold futures for delivery in December settled at $4.004.4, an increase of 0.7%. Investors waited for developments in France where the shocking resignation of Sebastien lecornu as Prime Minister on Monday caused concern about France's fiscal outlook. Despite the ongoing U.S. shutdown, major U.S. indexes have been closing at record highs. This optimism is due to the possibility of Federal Reserve rate cuts and the artificial intelligence dealmaking. Jake Dollarhide is the chief executive officer at Longbow Asset Management, located in Tulsa. He said that with tech stocks, stocks, and gold at record highs, "something has to give." "Are those nervous Nellies in gold right or is the AI trading correct?" This is what we will find out over the coming weeks and months. The Dow Jones Industrial Average dropped 147.37, or 0.31 %, to 46.548.47. The S&P 500 declined 28.65, or 0.43 %, to 6,711.63 while the Nasdaq Composite lost 158.71, or 0.69 %, to 22782.96. Tesla shares were down by 4.1%, the largest drag on both the S&P 500 index and the Nasdaq index. The company had unveiled cheaper versions of the Model Y SUV as well as its Model 3 sedan. This was done to counter falling sales and waning share of the market. Consumer discretionary led the way with a drop of more than 1%. IBM shares rose 1.6% following the announcement of a partnership between Anthropic, a startup in artificial intelligence. The MSCI index of global stocks fell by 4.64 points or 0.47% to 91.42. The STOXX 600 Index fell by 0.17%. Blue-chip French stocks Closed flat after giving up gains After a sharp sell-off Monday, triggered by Lecornu’s abrupt resignation. Lecornu, who faces increasing pressure from the President Emmanuel Macron to call snap parliamentary election or resign, was given the opportunity to have last-ditch discussions with various party members on Tuesday in order to find a solution to this crisis. The yields on French bonds rose by 2 basis points, to 3.59%. Investors in Japan snapped up government debt in an indication of lessening nervousness following the election of Sanae Takaichi as leader of the ruling Party. Takaichi is a supporter of low interest rates and large spending. This led to a drop in the value of domestic bonds, the currency, and sent stocks to record highs. The Japanese yen fell 1.02% to 151.89 dollars, while the euro dropped 0.43% to $1.1659. Benchmark U.S. yields are on the decline Investors waited Further comments from Fed policymakers before the U.S. Central bank's meeting in late this month. The yield on the benchmark U.S. 10 year notes dropped 3.7 basis points from late Monday to 4.125%. Investors have been forced to rely on independent data and remarks by monetary policymakers to gauge the Fed's outlook for rate cuts. The oil price was little changed. A smaller-than-expected increase to OPEC+ output in November was Offset by signs A possible glut of supply is a concern. U.S. crude oil rose by 4 cents, settling at $61.73 per barrel. Brent dropped 2 cents, settling at $65.45. Investors digested the news that the World Bank raised its growth forecasts for China in 2025, as well as those for most of the region. However, it warned about a slowdown next year.
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Brazilian diesel imports surge in September as US gains Russian market share
StoneX, a consultancy, said that Brazil's imports of diesel in September reached their highest level since 2023. This was due to a sharp increase in U.S. volume to compensate for declining Russian supplies, amid high agricultural demand. Why it's important The increase in imports is a reflection of the robust domestic demand that Brazil experiences during its soybean planting season, and reflects global market shifts as a result of disruptions in Russian exports. Brazil imports about 20% of its total diesel consumption. By the Numbers In September, total diesel imports reached 1,77 billion liters. This represents a 9.4% rise on the previous year. The United States contributed 45.8%, while Russia's contribution fell to just 27%, the lowest level since March 2023. Middle Eastern producers such as Saudi Arabia and Oman contributed 19% while India provided 7%. KEY QUOTE Bruno Cordeiro said that the strong growth in imports is due to both an increase in Diesel B (mixed biodiesel), sales in Brazil, and a decrease in diesel A production (pure diesel). CONTEXT The Russian market share is declining due to the Ukrainian drone attacks against its refineries, and export restrictions that followed. After Western sanctions, Brazil had become the country's biggest diesel supplier. Diesel demand typically increases during Brazil's soybean harvest season, when the country is awash in soybeans.
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EIA: US natgas production and demand will reach record highs by 2025
The U.S. Energy Information Administration (EIA) said Tuesday that the Short-Term Energy Outlook, or STEO, will show record levels of natural gas production and demand in 2025. EIA predicted that dry gas production would increase from 103.2 billion cubic feet per day (bcfd) in 2024, to 107.1 bcfd by 2025, and 107.4bcfd by 2026. This compares to a record of 103.6 bcfd for 2023. The agency also predicted that domestic gas demand will increase from 90.5 bcfd, a record in 2024, to 91.6 bcfd by 2025 and 2026. The EIA forecasts from September were 106.6 bcfd in production and 91.5 for demand. The agency predicted that average U.S. exports of liquefied gas would increase to 14.7 bcfd by 2025, and 16.3 bcfd by 2026. This is up from 11.9 bcfd at a record in 2024. The EIA predicted that U.S. coal output would increase from 512.1 million short tonnes in 2024 - the lowest level since 1964 - to 531.3 millions tons in 2020, before dropping to 493.6 tons in 2030, which is the lowest level since 1963. EIA predicted that carbon dioxide (CO2) emission from fossil fuels will rise from a low of 4.793 million metric tonnes in 2024, to 4.880 millions metric tones in 2025, as oil, gas and coal consumption increases. Then, the emissions would ease to 4.844 million metric tones in 2026, as oil and coal usage declines. (Reporting and editing by Rod Nickel, Emelia Sithole Matarise and Scott DiSavino)
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Mercuria Partners Group to lower Swiss tariffs by pledging US energy investments
Two people familiar with the matter have confirmed that a group of Swiss firms, including energy traders Mercuria and Partners Group, has pledged more than $6 billion to invest in U.S. Energy as part of efforts aimed at lowering U.S. Tariffs on Switzerland. Donald Trump, the U.S. president, shocked Switzerland in August by imposing import tariffs of 39% on Swiss companies. He justified them by citing the U.S. deficit in trade with the Alpine nation, which had eliminated industrial tariffs last year. Since the tariff shock in the U.S., the Swiss government and private sector have been working together to put together a package of business and investment measures that will help reduce the U.S. deficit and, with it, Trump’s tariffs. Last month, the Swiss took proposals to Washington. Mercuria and Partners Group is among the companies that are working to assist the government. The government has, for example, proposed increasing energy purchases in order to reduce the U.S. Trade Deficit. In August, senior figures from both companies accompanied Swiss officials to Washington for discussions on tariffs. Partners Group and Mercuria declined comment. One source said that Partners Group pledged to double the capacity a U.S. - Mexico natural gas network operated by pipeline operator ESENTIA as part of its North American infrastructure under proposals drafted early September. The source noted that Mercuria had revised its plans. These include new energy generation, carbon storage and capture, as well U.S. oil extraction. The person who spoke to me said that when the plans were first drafted in early September, Mercuria and Partners Group, as well as Swiss energy investments, were valued at more than $6 billion. According to a second source, the Swiss energy package that includes Mercuria Partners Group and other companies comprises investments totaling around $7 billion. According to sources, these documents were part of a larger package prepared for Swiss Economy Minister Guy Parmelin’s visit to Washington on September 5, where he would meet with Trump officials. SWISS GOVERNMENT SEEKS RAPID AGREEMENT Switzerland is still trying to negotiate lower tariffs with U.S. officials. The Swiss Economy Ministry refused to answer any questions regarding ongoing discussions. However, it did say that the Federal Council was committed to improving tariffs with the United States. "It optimised its proposal to the U.S. to achieve a quick agreement." The ministry stated that it would continue to conduct diplomatic and political exchanges in order for the tariffs to be reduced quickly. The Swiss also proposed, as reported by last month's report, the construction of gold refinery capacity in the U.S. to reduce the amount that the U.S. imports of Swiss gold. According to sources familiar with the situation, the Swiss also propose increasing purchases of U.S. defense materiel. Dave Graham and Dmitry Zhdannikov contributed to the report. Oliver Hirt contributed additional reporting. Mark Potter (Editor)
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Gold miners' investments bask in record price
Investors bet that record gold prices would drive strong margins, capital flows and shareholder returns. According to LSEG Lipper, gold mining funds are up 114% in the past year, outpacing both technology funds (up 27%) and natural resource funds (up 23.7%). According to data, gold mining funds received $5.4 billion inflows during the third quarter, which is the biggest quarterly movement since December 2009. The price of gold reached a new record on Tuesday, as the U.S. shutdown continued and demand was boosted by expectations that the Fed would cut rates this month. Gold miners have been lagging behind the bullion due to increasing costs and operational challenges in recent years. However, in 2025, record prices will boost profits and cash flow, strengthening balance sheet and providing leveraged exposure to gold rally. Trevor Yates is a senior investment analyst with Global X ETFs. He said: "Despite the rally the sector remains under-owned. This leaves room for new investors who can drive multiple expansion." We're especially positive on smaller miners, explorers and producers who offer a greater leverage over the gold price. They are also set to benefit from continued industry consolidation. George Cheveley said that strong earnings were reinforcing the cost discipline. Some miners are accelerating projects, funded with cash. This is a move which supports growth, and eliminates borrowing. Gold miner Newmont reported stronger-than-expected second quarter profits and announced a $3? Share buybacks of $3?billion were announced by Newmont, a gold miner. Barrick also beat forecasts for profits and increased its quarterly dividend 50%. Some companies have taken advantage of the current rally to raise capital via IPOs or share sales. China's Zijin Gold International secured $3.2 billion while Merdeka Gold raised $280 million. The MSCI Gold Miners Index, despite doubling by 2025, still trades with a P/E ratio of 14.3, which is below its 10-year average of 16.7. This suggests that there is room for further valuation growth. Gold companies are enjoying the best margins ever, according to Adrian Hammond, research analyst at SBG. He said that investors could find opportunities in companies who are disciplined with their cash flow and eager to reward shareholders.
Analysts' reactions to the US-China Trade Agreement
U.S. officials and Chinese officials announced that they had reached an agreement on a framework for re-establishing their trade truce and removing China's restrictions on exports of rare earths. However, there was little indication that the long-standing trade disputes would be resolved.
Li Chenggang, Vice Minister of Commerce in China, said that the two teams agreed to implement their Geneva consensus. They would then take the framework agreed upon back to their respective leaders.
An official at the White House said that the agreement allows the U.S. a tariff of 55% on imported Chinese products. The tariff includes a baseline "reciprocal tariff" of 10%, a fentanyl-trafficking tariff of 20% and a 25 percent tariff that reflects existing tariffs. China would impose a tariff of 10% on U.S. imported goods.
MARKET REACTION:
S&P 500 was up 0.1% as investors waited for more details and to see if the decision would be implemented.
QUOTES:
GENE GOLDMAN IS THE CHIEF INVESTMENT OFFICER FOR CETERA INVESTMENT MANAGEMENT IN EL SEGUNDO CA.
The equity markets breathed out a sigh after hearing about a possible US-China deal. This news should be taken with caution. While President Trump announced that the imports of Chinese goods would increase from 30% to 50% and Chinese rare-earths exports could resume, little is known about what China will get in return. "I doubt that this is a one way deal, and therefore the market caution observed overnight."
SAM STOVALL IS THE CHIEF INVESTMENT STRATEGIST AT CFRA RESEARCH IN ALLENTOWN PENNSYLVANIA.
"We have seen a relatively tepid reaction to news of the 'deal' made with China. To me, that indicates indifference. The market is saying, ok, you've agreed to keep talking and have set up a structure for future discussions, but there hasn't been anything really significant resolved. Tell me something I should know. We all know it won't be good if there isn't a comprehensive solution. We would have to buy our dolls elsewhere, and that will cost more.
The market has struggled to hold on to its gains despite better than expected inflation figures today. I can only assume that the people wanted to hear more about the China negotiations. Investors may have sold because they thought we were overbought.
OLIVER PURSCHE SENIOR VICE-PRESIDENT, ADVISOR WEALTHSPIRE ADVISE, WESTPORT CONNECTICUT
The market hasn't reacted to the deal yet because we haven’t seen details. The devil lies in the details, as with most things. Another big news item is that the U.S. has a framework in place for future discussions with China, which contradicts a previous statement that it was a done deal.
The report on inflation this morning, although softer than expected was due to lower energy prices, and also an indication of further slowdowns in the U.S. economy.
ADAM BUTTON, CHIROP CURRENCY ANATOMIST, FOREXLIVE TORONTO
Trump certainly has tried to spin the news positively. "Obviously, this is good news. China and the U.S. reached an agreement. It's unclear what the U.S. is doing and what China wants to achieve. Trump made a hint at this when he said he wanted to expand China's trade. The U.S.-China negotiations have in some ways raised more questions than they have answered. Will this tariff rate stick? What are the U.S. & China working on?
The ultimate conclusion about China is that it's not getting worse. So, that's good. "We probably built in some expectation of maybe material progress."
JOHN PRAVEEN MANAGING DIRECTOR PALEO LEON PRINCETON NJ
"The worst case scenario is likely behind us. Both sides are trying to save face. The U.S. thought the issue of rare earths was important. They reached an agreement. It is a question of whether or not it will be implemented. "The fact that they have an agreement at all is likely to be a relief for market.
Both sides got something. It's important that the situation is de-escalating. It's likely a relief to the markets."
We'll need to wait to see if the tariffs are further reduced. After the dust settles, it'll probably be a bit lower because this tariff level will likely cause inflationary pain to the consumer."
When Trump and Xi get together, they will probably reduce it further. "You need to keep something aside for the meeting."
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:
"That is good news, of course. It's still a while away, and both Trump and Xi have to ratify it, but it's a given that this will happen. This is good news, and it eases concerns... But the real deal is that there's an agreement which would allow China to resume exports of rare-earth products, something I believe was crucial to this."
ROBERT PAVLIK SENIOR PORTFOLIO MANAGEMENT, DAKOTAWEALTH, FAIRFIELD CONNECTICUT
It's a positive headline at least. It's positive that both countries are working together to exchange technology for rare-earth materials. We'll wait to see if Xi approves it, and what Trump says."
WASIF LATIF, PRESIDENT, AND CHIEF INVESTOR, SARMAYA PARTNERS PRINCETON NEW JERSEY
"It is becoming clearer that the initial high tariffs and large scales of tariffs were a negotiation tactic. When you saw the cards that each side brought to the table, China with rare earths and the US with other trade-related chips including the impact on students here at universities, you could see how they both wanted to reach an agreement. This is good news for investors.
"However the market already anticipated this because the rally we saw at the low tariffs was already baking in a better result than what was initially being put out. The futures started to fall when the agreement was announced in the early hours of this morning. It felt more like a situation of selling the news than a market impact, because many of the expected benefits were already backed in.
The CPI is currently the news that moves markets. It will be interesting to observe the long-term trade impact of tariffs. Tariffs have been a hot topic for many years. Some people say they are inflationary, while others claim it is deflationary. "But I think that the truth is somewhere between.
CHRIS WESTON HEAD OF RESEARCH PEPPERSTONE MELBOURNE
The devil is in the detail, but the lack reaction indicates that this outcome was fully expected.
The Geneva agreement is a good thing, but the fact that there was no reaction on S&P500 Futures and only small movements in CNH and AUD suggests the outcome was expected. Details matter, particularly the amount of rare earths going to the US and the freedom of US chips to go East. But for now, as long as headlines about the talks between both parties are positive, risk assets will be supported.
LIN GENGWEI is the co-founder and CEO of RAIN TREE PARTNERS in Singapore.
Both sides are willing and under pressure to reach an accord. The Sino-U.S. Rivalry will continue to persist despite the temporary success of these talks.
The U.S. may ease restrictions on chip exports from China in response to both pressures from Beijing and the domestic semiconductor industry.
MARK DONG, CO-FOUNDER OF MINORITY ASSET MANAGEMENT, HONG KONG:
This is good news for the market. There's now a bottom-line that neither side will cross.
Both sides will work to reduce the trade deficit.
ZENG WENKAI, CHIEF INVESTMENT OFFICER, SHENGQI ASSET MANAGEMENT, HONG KONG:
The market probably anticipated this -- Trump always chickens out (TACO).
"Look at the way countries negotiate with the U.S. today; it is no longer how Vietnam did things in the early days. Japan and South Korea have taken a more aggressive stance. "Kneeling is not the answer. It only leads to more bullying."
CHARU CHANANA CHIEF INVESTMENT STRATEGIST SAXO SINGAPORE
The markets will welcome the change in tone, from confrontation to cooperation. We're still not out of danger, even though there are no more meetings planned. Next, Trump and Xi must endorse and enforce the framework.
It's important to not confuse this tactical deescalation with a complete reversal in strategic decoupling. The competition in technology, supply chain, and national security is still very strong. There will always be new issues, and it is the implementation of this "old deal" that will determine how far we go.
TAN XIAOYUN IS THE FOUNDING PARTNER FOR ZONSO, GUANGDONG.
"Talks will proceed under the framework agreed upon, and I think the U.S. is more willing to compromise than China in order to reach an agreement."
"Under current circumstances, U.S. faces more pressing issues, while the Chinese have more breathing room. China used to be defensive but now is offensive by leveraging rare earths and market access. This marks a shift in power and strength."
MICHAEL McCARTHY, CHIEF OFFICER MOOMOO AUSTRALIA SYDNEY
"I will be watching how bonds trade on this day in light of it." Currency markets seem to be taking this in stride and equity markets have returned to their all-time highs.
Since weeks, the market has been anticipating this deal. It will be positive for the market, as the dollar will weaken and equities will rise, but this is not a major change.
CAROL KONG CURRENCY STRATEGIST, COMMONWEALTH BBANK OF AUSTRALIAN, SYDNEY
"I believe in this environment...any hints of progress on a possible trade agreement will be beneficial for markets.
"It's going to be hard for both sides and take a very long time before they can reach a comprehensive agreement." This type of comprehensive agreement usually takes years to reach, so I am skeptical that the framework agreed upon at the London meeting will be comprehensive. "Tensions may have de-escalated temporarily, but will escalate in the coming months."
RAY ATTRILL HEAD OF FOREX STRATEGY, NATIONAL AUSTRALIA BANK SYDNEY
It's too early to declare that a new US-China trading agreement is imminent. We've heard a lot of positive things about agreements, but we've not seen any real progress.
"Our view remains that, whatever is agreed upon in the next few weeks and months - the baseline view - is that the global tariff situation will be far worse than it was before Trump became president. We'll still have a tariff climate we believe is detrimental to global growth."
TONY SYCAMORE MARKET ANALYST IG SYDNEY
If we maintain the terms of the Geneva Agreement we will see US tariffs for Chinese goods remaining at 30% for some time, and Chinese tariffs for US goods remaining at 10%. This is a reduction from 145% and 125%, respectively. This would be amazing.
"I think that was the consensus of the market... now people are trying to decide whether they want to buy or sell the US Dollar and I believe that reflects a little bit of this indecision.
The U.S. equity market is holding up at the moment because of this. I still think they are overcooked and need to pullback. "It's been an incredible run, and we're pushing up against the records from February. For me, it makes sense that they take a break."
DAVID CHAO, GLOBAL MARKET STRATEGIST, ASIA PACIFIC, INVESCO, HONG KONG:
"Recent headlines have shown that both the US and China are ready to reach a deal. This is good news for both markets and policymakers. We believe that cooler heads will prevail and the path has been set for a closer dialogue between top leaders in both countries.
The news that the US and China may have reached a deal over rare earths, semiconductors, or jet engine parts is a good indicator that we are past peak tariff uncertainty. (Compiled by Global Finance & Markets Breaking News)
(source: Reuters)