The Chinese government has begun encouraging companies to buy a certain amount of U.S. farm products including pork and soybeans and will exempt these goods from additional tariffs. This corroborates with President Donald Trump's tweet yesterday where he is expecting China to start buying large amounts of agricultural products from the U.S.
Here is how the markets closed for the weekend:
Dow Jones Industrial Average (DIA): +0.13% or 36.28 points
NASDAQ Composite Index (QQQ): -0.22% or -17.75 points
S&P 500 Index (SPY): -0.073% or -2.20 points
U.S. farmers are a group that is highly affected by the trade war between U.S. and China, so the import of goods by China will come as a relief. This move to import goods also comes following the Trump administration's delay of the additional imposed tariffs on Chinese imports by two weeks (October 15 from October 1) and is a major gesture of good will from China to increase the purchases of U.S. farm products.
The Trump administration Thursday had reported that there were talks of an interim trade deal with China that would lessen tensions ahead of the next round of trade talks that are scheduled for October.
Over the past few weeks, risk assets have been responding positively to the news of trade agreements coming. U.S. markets have been in the green most of the week and the S&P 500 had closed yesterday with a near record high.
In market news, the U.S. Commerce Department had reported that retail sales have risen by 0.4%, with sales increasing from internet retailers, building material sellers, and auto dealers. In addition, University of Michigan had issued a survey that saw consumer sentiments had risen to 92.0 for the month of September, an increase from August's reading of 89.8. This survey follows the trends of consumer spending, so retail sales have been increasing because consumers have more confidence in the economy.
In stock news, bank shares have grown following an increase in treasury yields, all which lessen worries of a coming U.S. economic recession. Bank of America (NYSE: BAC) rose 1.63%, J.P. Morgan Chase (NYSE: JPM) went up 1.97%, and Citigroup (NYSE: C) gained 1.59%. It seems that the movements towards a trade agreement have been positively affecting the U.S. economy and markets.
All and all, the U.S. stock market had a positive growth week, with many sectors seeing positive readings. Monday's market update will follow more news surrounding trade negotiations between China and the U.S. as the decisions made great effect the global market.