Trump surprised stock markets today following some encouraging statements regarding the ongoing trade spat between the U.S. and China.
Stock markets rose at the opening bell on Friday morning, a day after a sharp sell-off, as sentiment was damaged by observations from President Donald Trump planning for a speedy end to the extended trade war with China.
Dow Jones scrambles to prevent fifth straight weekly loss
The Dow Jones Industrial Average cut its losses for the week to 0.4% early Friday, in what will likely wind up being a fifth-straight weekly loss. Three- and four-week declines are not unusual for the index, but the Dow has not fallen for five straight weeks in nearly eight years.
The fall leaves the Dow down 5% from its late-April high, and nearly 6% from its all-time high in October. The index has found relief at its 200-day moving average in each of the previous three weeks. The Dow Jones Industrial Average has not ended a week below its 200-day line since late January.
Are markets adapting to the trade war rhetoric?
At the core of the current tit-for-tat is Chinese telecom giant Huawei.
The United States placed Huawei on a trade blacklist last week, barring U.S. business from collaborating with the world's biggest telecom network equipment maker and escalating trade war in between the world's two most important economies.
And on Thursday, U.S. Secretary of State Mike Pompeo accused the telecom giant of lying about its relations with the Chinese Federal federal government. The statement mimicked similar views from other U.S. regulators who have targeted Huawei with allegations of spying, lifting intellectual properties and more. Related: Chinese Tech Giant Tencent Completes Asia’s Largest Bond Sale
Pompeo also rejected Huawei CEO Ren Zhengfei's assertions that his company would never share user data and said he believed more American businesses would sever ties with the tech giant.
Chinese leaders have defended the telcom giant, with Chinese Foreign Ministry representative Lu Kang stating “Recently, some U.S. politicians have continually fabricated rumors about Huawei but have never produced the clear evidence that countries have requested.”
The spokesman added, U.S. politicians continue to “fabricate lies to try to mislead the American people, and now they are trying to incite ideological opposition”.
By Michael Kern for Safehaven.com