Breaking: Stocks jump on reports of tariff delay

2:57 PM December 10, 2019

Summary:

  • US indices spike higher on trade news

  • Reports of a delay to tariffs scheduled for 15th Dec

  • US500 jumps nearly 20 pts; VOLX crushed 

 

The reaction in stock indices to some trade news in the past hour has once more revealed the heightened level of sensitivity that the market shave on this front at present, with US indices spiking higher on a positive headline. The Wall Street Journal have published an article which claims that  “ U.S. and Chinese trade negotiators are laying the groundwork for a delay of a fresh round of tariffs set to kick in on Dec. 15, according to officials on both sides,” and this appears to be behind the move.

The US500 has moved firmly higher on the news but has failed to decisively break above the H1 cloud. The recent high around 3141 could be seen as potential resistance but a move above there opens up a retest of the record highs around 3158. Source: xStation  

 

You could argue that this is little more than upbeat rhetoric and later on in the same article it is pointed out that the main roadblock to a deal is Washington’s demand that China guarantee its pledge to “buy more American soybeans, poultry and other agricultural products. However, the market is clearly buying into it and unless there’s signs of a reversal then these gains look set to stick. The gains mean that the futures now point to a green open for the S&P500 at 2:30PM (GMT). 

The volatility index has dropped sharply on this news and in doing so has fallen over a handle from its earlier highs of 16.13. Source: xStation 

 

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