World stock indexes have jumped, with Wall Street posting a fourth straight week of gains, and the US dollar reaching its first positive week since mid-December as optimism increased that an end is in sight to the US-China trade conflict.
Stocks were boosted by a Bloomberg report that said China sought to raise its annual goods imports from the United States by more than $US1 trillion in order to reduce its trade surplus to zero by 2024.
That followed a report on Thursday that US Treasury Secretary Steven Mnuchin was considering lifting some or all tariffs imposed on Chinese imports. The Treasury denied Mnuchin had made any such recommendation.
While the equity rally lifted all major sectors, trade-sensitive industrials .SPLRCI posted among the biggest S&P 500 sector gains, up 1.9 per cent on the day.
The Philadelphia SE semiconductor index rose more than 2 per cent and Germany’s exporter-heavy DAX was up 2.6 per cent.
‘There seems to be some progress going in the trade negotiations,’ said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
While that was the biggest influence, ‘we’ve still got momentum since the first of the year,’ he said. ‘Some of the money that came out of the market at year-end, whether it was high frequency traders or tax-loss selling, is coming back in.’
Adding to strength in equities and supporting US Treasury yields was data that showed US manufacturing output increased the most in 10 months in December.
Some strategists said relatively light equity trading volume this week indicated that some investors were still waiting on the sidelines.
The Dow Jones Industrial Average rose 336.25 points, or 1.38 per cent, to 24,706.35, the S&P 500 gained 34.75 points, or 1.32 per cent, to 2,670.71 and the Nasdaq Composite added 72.77 points, or 1.03 per cent, to 7,157.23.
The S&P 500 registered its biggest four-week percentage gain since October 2011.
The index is now 8.9 per cent below its September 20 record close after dropping 19.8 per cent below that level – near the 20-per cent threshold commonly considered to confirm a bear market – on Christmas Eve.
The pan-European STOXX 600 index rose 1.80 per cent and MSCI’s gauge of stocks across the globe gained 1.23 per cent.
Chinese Vice Premier Liu He will visit the United States on January 30 and 31 for another round of talks aimed at resolving the trade dispute between the world’s two largest economies.
Recent indicators show signs that the Chinese economy is losing momentum.
The trade optimism boosted the dollar against other major currencies.
The dollar index rose 0.31 per cent, with the euro was down 0.26 per cent to $1.1365.
US Treasury yields rose to three-week highs as investors piled back into Wall Street.
Oil prices jumped about 3 per cent, rising after OPEC detailed specifics on its production-cut activity to ease global oversupply.
Brent crude gained $1.52 to settle at $62.70 a barrel, or 2.48 per cent higher.
US WTI crude futures added $1.73 to settle at $53.80 a barrel, or 3.32 per cent up.