Intel stock extends gains after report of possible U.S. government stake
(Adds oil, gold settlement prices)
* MSCI's world index, shares on Wall Street hit new highs
* Stocks back off highs as details on trade pact emerge
* Oil gains as trade accord seen helping global growth
* Dollar edges slightly higher, yen falls
By Herbert Lash
NEW YORK, Jan 14 (Reuters) - Oil prices rose and a gauge of
global equity markets hit a new high on Tuesday as investors
awaited the signing of a China-U.S. trade deal they hope will
spur world economic growth, after the economy in 2019 saw its
weakest year since the financial crisis.
Gold prices slid as the planned signing Wednesday of the
Phase 1 trade deal dampened both the appeal of safe-haven
bullion and the Japanese yen, which dropped to eight-month lows.
MSCI's all-country world index and shares on Wall Street set
intra-day highs before backing off a bit as investors said the
long-awaited trade deal was priced into the market. Stocks in
Canada and Australia also surged to records.
Stocks on Wall Street turned lower after Bloomberg reported
that existing U.S. tariffs on $360 billion of Chinese imports
will likely stay in place past the U.S. presidential elections
in November as Washington reviews compliance with the trade
pact.
Investors fear the global economy may not turn up enough to
lift corporate earnings and share prices if tariffs remain in
place for most of this year, said Jim Paulsen, chief investment
strategist at the Leuthold Group in Minneapolis.
"People thought the tariffs would come off, the arguing
would quit and manufacturing would restart across the globe,"
Paulsen said.
The Trump administration apparently would like to retain
leverage over China to enforce the trade pact, he said, while
noting that retaining the tariffs is just one factor affecting
world growth, he said.
"But certainly it's worth a trading headline in the
afternoon," Paulsen said.
Details are slowly emerging about the deal. China has
pledged to buy almost $80 billion of additional manufactured
goods from the United States over the next two years as part of
a trade war truce, a source told Reuters on
Monday. would also buy over $50 billion more in
energy supplies and boost purchases of U.S. services by about
$35 billion over the same two-year period, the source said.
Peter Tuz, president of Chase Investment Counsel in
Charlottesville, Virginia, said reports of additional purchases
"was incrementally positive."
"The fact that the China thing is not getting worse and we
have an agreement is lessening one of the things that could go
wrong in 2020," Tuz said.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.02%, while the pan-European STOXX 600 index .STOXX rose
0.29%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
10.64 points, or 0.04%, to 28,917.69. The S&P 500 .SPX lost
7.28 points, or 0.22%, to 3,280.85, and the Nasdaq Composite
.IXIC dropped 25.06 points, or 0.27%, to 9,248.87.
Overnight in Asia, Japan's Nikkei .N225 added 0.7% to hit
its highest level in a month. Australian shares rose by the same
margin to close at a record .AXJO .
Hong Kong's Hang Seng .HSI and Shanghai blue chips
.CSI300 hit multi-month peaks before running out of steam.
China's yuan was slightly weaker after earlier hitting a
high last seen in July. The U.S. Treasury Department on Monday
reversed its designation of China as a currency manipulator in
what is seen as a conciliatory gesture before the trade deal is
signed. The dollar index .DXY rose 0.03%, with the euro EUR=
down 0.06% to $1.1126. The yen JPY= weakened 0.02% versus the
greenback to 109.97 per dollar.
Global oil benchmark Brent crude rose as the trade deal
marks a major step in ending a dispute that has cut global
growth and dented crude demand.
The trade dispute had a tangible impact on global oil demand
last year, said Tamas Varga, an analyst at broker PVM. Varga
pointed to 2019 demand growth of 890,000 barrels per day,
compared with initial forecasts of 1.5 million barrels per day.
Brent crude LCOc1 gained 29 cents to settle at $64.49 a
barrel and West Texas Intermediate crude futures CLc1 rose 15
cents to settle at $58.23 a barrel.
U.S. consumer prices rose slightly in December even as
households paid more for healthcare, and monthly underlying
inflation slowed, supporting the Federal Reserve's desire to
keep interest rates unchanged at least through this year.
The weak inflation report from the Labor Department on
Tuesday came on the heels of data last week showing a moderation
in job growth in December. Economists said these developments
were flagging a sharp slowdown in domestic demand. Benchmark 10-year notes US10YT=RR last rose 9/32 in price
to yield 1.8161%.
U.S. gold futures GCv1 settled down 0.4% at $1,544.60 an
ounce.
U.S. Treasury drops China currency manipulator label ahead of
trade deal signing White House plans US-China Phase 1 ceremony, still no final
deal text Dec yuan-denominated exports up 9%, imports up 17.7%
Lighthizer says nearly done with translation of China trade
deal businesses hold back, U.S. consumers seen boosting
big banks' profits $12 trillion stocks market rally https://tmsnrt.rs/2tfURfX
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