Mixed sign on Wall Street: US will not eliminate tariffs on China
Mixed sign on Wall Street: US will not eliminate tariffs on China
Wall Street has moderated its profits and closed with a mixed sign after Bloomberg has published that the US will maintain the current tariffs on Chinese products until the November presidential elections, despite the fact that both nations will sign the so-called ‘Phase One trade agreement on Wednesday’.
The Dow Jones has risen 0.11% driven by JPMorgan, but has lost the level of 29,000 points after having scored an intraday high at 29,054 integers. Together with this bank, other financial institutions such as Citi and Wells Fargo have been the first to publish their figures for the fourth quarter of 2019. The S&P 500 and the Nasdaq They have gone down very smoothly after their records on Monday.
The bank led by Jamie Dimon has been the first to publish results and has risen 1.17% after convincing with them, since it has exceeded analyst expectations. In addition, its annual benefit of 36.4 billion dollars has been the largest ever published by an American bank.
In negative, Wells Fargo has fallen 5.4% after disappointing its figures, since its earnings have been 55% lower than the same period of the previous year. Citigroup has risen 1.5% after announcing an increase in its profit to 4,980 million dollars. Overall, the KBW Banks Index rebounds 0.8%. Finally, Delta Airlines has risen 3.3% after exceeding forecasts.
Continuing with the results, the accounts are expected to continue to show a mediocre balance of earnings . Experts believe that only in 2020 will we really see a vigorous rebound after a very sparse 2019 in terms of business benefits.
CHINA AND THE US STILL CLOSE
This Tuesday was also news China. The US has removed Beijing from its blacklist of currency handlers. An announcement that takes place in a key week with the Asian giant already in Washington to seal the phase one trade agreement on Wednesday and that has caused a strong yuan rebound in the currency market.
Although from the South China Morning Post, they lower some optimism and point out that the commercial war “is not over yet” and this pact is only “the first round of the game.” For their part, the experts of the Swiss bank Julius Baer affirm that “the persistent geopolitical rivalry between the US and China prevents the trade agreement from significantly increasing the sentiment” of companies worldwide.
According to Bloomberg, the two parties have agreed that they will review the current tariffs on Chinese imports worth 360 billion dollars ten months after the signing of the agreement . And any reduction thereof will depend on the degree of compliance of the Chinese Government . The market has moderated the increases after this news.
ECONOMY AND OTHER MARKETS
On an economic level, Chinese exports and imports have far exceeded forecasts in the month of December. In the US, the Consumer Price Index (CPI) rebounded 0.2% in December, to an annual rate of 2.3%, in line with the forecasts. In addition, the underlying CPI has closed 2020 at 2.3%, also as expected.
In other markets, West Texas oil rises 0.8%, to $ 58.58, while the ounce of gold drops 0.2%, to $ 1,547. The geopolitical risk premium of crude oil has been relegated to the background and gold, considered the active refuge par excellence, has clearly turned down.
The geopolitical tension between Iran and the US has been relegated to the background after the demolition of the Persian regime by mistake of a 737 plane with 176 passengers, half of them Iranian. This is causing internal revolts in Tehran and other cities and has caused an internal crisis for the Ayatollah government.
For its part, the euro depreciates 0.25% and changes to $ 1,1105. Finally, the profitability of the 10-year American bond remains at 1.84% and that of the 2-year bond at 1.58%.
