Major US stock indexes have increased significantly, as comments by US President Donald Trump about the resumption of US-China trade negotiations have increased the optimism of market participants awaiting Fed policy easing.
Trump reported on Twitter that he “had a very good telephone conversation” with President Xi. He added: “Next week we will have an extended meeting at the (G-20) summit in Japan. Our special teams will begin negotiations before our meeting. ” The summit will begin on June 28th. Chinese media reported that President Xi confirmed a meeting with Trump on the G-20.
It is expected that the US central bank will leave interest rates unchanged following its two-day meeting, which will begin on Tuesday, but will lay the foundation for rate cuts later this year. According to the FedWatch CME Group tool, traders expect three rate cuts by the end of the year. The decision of the Fed on rates will be announced at 18:00 GMT on Wednesday. Fed Chairman Jerome Powell will also hold a press conference after the announcement.
Investors also welcomed the prospect of additional stimulus from the European Central Bank. Draghi, president, the ECB said today that it may be necessary to soften the policy again through new rate cuts or asset purchases if inflation does not return to its goal.
Against this background, ambiguous data on the US real estate market went unnoticed. As the report of the Ministry of Commerce showed, the volume of housing construction in the past month decreased by 0.9% to the annual norm, taking into account seasonal fluctuations of 1.269 million units, amid falling home construction for one family. The data for April were revised upwards to show that housing construction is growing at a rate of 1,281 million units instead of an increase to 1,235 million units, as previously reported. Economists had forecast that housing construction would increase to 1,239 million units in May. At the same time, building permits rose by 0.3% to 1.294 million units in May. This was the second monthly increase in permits.
Most of the components of DOW finished trading in positive territory (24 out of 30). The growth leader was the shares of The Boeing Company (BA; + 5.55%). The Procter & Gamble Co. shares turned out to be an outsider. (PG; -1.21%).
Almost all sectors of the S & P recorded an increase. The largest growth was shown by the industrial goods sector (+ 2.0%). Only the utility sector decreased (-0.2%).
At the time of closing:
Dow 26,465.54 +353.01 +1.35%
S & P 500 2,917.75 +28.08 +0.97%
Nasdaq 100 7,953.88 +108.86 +1.39%
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