World stocks are rising on hopes for US-China trade talks in 2 weeks
- World stocks rose on Tuesday on renewed hopes for an end to the US-China trade war, after US Treasury Secretary Steven Mnuchin said negotiations will resume in two weeks.
- Traders also cheered reports that China has granted waivers for tariff-free soy purchases to several companies.
- The optimism outweighed disappointing US service data and fresh signs of a manufacturing slowdown in Germany and Japan.
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World stocks rose on Tuesday on renewed hopes for an end to the US-China trade war, after US Treasury Secretary Steven Mnuchin said negotations will resume in two weeks. Traders also cheered reports that China has granted waivers for tariff-free soy purchases to several companies.
"It's not next week, but the following week we'll be having those talks," Mnuchin said on Fox Business Network. He added the two sides made strides towards resolving the dispute in deputy-level meetings last week.China issued waivers to several private and state-owned businesses allowing each to buy 2 million to 3 million tons of soybeans, according to Bloomberg. Chinese purchases of US agricultural products are key to the trade talks, as President Donald Trump is keen to secure the votes of American farmers in his bid to be reelected next year.
Good news on the trade front was tempered by mixed economic data. US manufacturing activity climbed to a five-month high in August, but the number of service-sector jobs fell for the first time in more than a decade. Moreover, Germany's manufacturing PMI reading dropped to its lowest level in nearly seven years, France's industrial sector posted sluggish growth, and Japan's manufacturing gauge signaled a sharper contraction.
"The world's economic growth momentum has stammered amid heightened global trade tensions, prompting investors to keep safe haven assets at elevated levels," Han Tan, market analyst at FXTM, said in a research note.
Here's the market roundup as of 9:45 a.m. (4:45 a.m. ET):
- European equities were broadly up with Germany's DAX flat, Britain's FTSE 100 up 0.1%, and the Euro Stoxx 50 up 0.2%.
- Asian indexes rallied with the Shanghai Composite up 0.3%, Japan's Nikkei up 0.1%, and Hong Kong's Hang Seng up 0.3%.
- US stocks are set to open higher with futures underlying the Dow Jones Industrial Average up 0.2%, and S&P 500 and Nasdaq up 0.3%.
- Oil prices have slumped with West Texas Intermediate crude down 0.8% at $58.20, and Brent crude down 0.9% at $64.20.