The markets opened Monday concerned about upcoming trade talks between China and the USA. Vice Premier Liu He stated ahead of the Washington talks that China has no intention to reform industrial policies or government subsidies.
Chinese officials were reportedly emboldened in their strategy by the impeachment proceedings against Pres. Donald Trump. If talks fail, an additional 5% increase in the current tariffs on Chinese goods is expected next week, while the list of Chinese companies added to the trade blacklist has continued to grow.
General Electric announced that starting 2021, it will freeze the pension plans of 20.000 employees in an effort to lower debt.
European data on Monday morning also proved worrying, with the Destatis German Factory Orders report revealing disappointing data. Additionally, the Sentix economic index for the Euro area dropped by 3.9 points to -16.8, its lowest level this year.
HSBC revealed a plan to trim back 4% of its employees worldwide.
Positive news came from Citigroup on Monday. Uber share value increased by 2.85% after Citi analyst Itay Michaeli upgraded the company’s rating from neutral to buy. Uber share value is down by 29.17% since its IPO on May 10th and last quarter registered a loss per share of -$4.72. Citigroup maintained its target price for Uber at $45 in anticipation of its third quarter earnings report, which is expected to show an improvement in fundamentals. The report is scheduled for release on November 14th.
Apple continued to rise after releasing its latest software updates. Last week Apple ordered an increase in iPhone 11 production by 8 million units, or approximately 10%, as a result in increased demand. Market Realist reported on Friday that Apple’s valuation reached 1.02 trillion dollars.
Apple shares increased by 1.71% after releasing its new MacOS Catalina. The update renders iTunes obsolete and replaces it with Apple TV, Apple Music and Apple Podcasts.
Sentiment improved during the day on news that China increased its purchases of US agricultural goods in August, reaching $1.5 billion in value. According to WSJ, soybeans represented more than 60% of these August purchases.
In addition, the USA signed a new Trade deal with Japan which, according to Business Insider, is expected to lift tariffs for US agricultural products worth $7 billion.
Dow Jones and S&P500 both closed higher on Monday, after increasing throughout the day, Dow by 0.70% and S&P by 0.66%. The same scenario played out in Europe with FTSE100 and DAX and in Asia with Nikkei and Hang Seng. Throughout the day the UK index increased by 0.75% and DAX rose by 1.06% while Nikkei 225 increased by 0.68% and Hang Seng by 1.34%.
Sources: businessinsider.com, destatis.de, investing.com, marketrealist.com, sentix.de, thestreet.com, wsj.com
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