Optimism over a trade deal in recent months has helped to increase investors` desire for risky investments and push the three major indexes to record highs. While Wall Street welcomed Friday`s developments, some analysts said stocks would no longer rise, with expectations of a trade deal already taken into account. We measure the impact of this news on domestic stock market returns. Eleanor Olcott, a Chinese policy analyst at TS Lombard, said in a statement that she did not expect another escalation before the U.S. presidential election, given the impact that would affect the stock market and consumer confidence. During this period of calm, Olcott expects the yuan to be stable and the Chinese economy to stabilize. The S-P 500 was adorned with the profits when President Donald Trump presided over a signing ceremony with Chinese government officials. The agreement requires China to do more to combat the theft of U.S. technology and trade secrets by its companies and public institutions, while sketching out a $200 billion spending explosion to try to bridge its trade imbalance with the United States.
The effects of regional trade agreements (ATRs) on countries׳ welfare are controversial. In this article, we evaluate these effects using stock market returns from an up-to-date dataset that spans 200 RTA ads, 80 savings and 20 years. We measure the impact of news on ATRs on domestic stock market returns after adjusting these returns for international stock market movements. We then link these unusual returnees to the characteristics of the RTA members and to the agreements themselves. We find strong evidence of the natural trading partner hypothesis; Stock markets rise more strongly when RTAs are signed between countries that already have high trading volumes. Stock markets also rise more strongly when the poorest countries sign RTRs and when RTAs are signed with smaller partners. Nor do we find evidence that capital markets expect a significant impact on trade diversion. Stock markets are rising more strongly for natural trading partners and poor countries. “This is a huge relief for technology investors,” said Daniel Ives, an analyst at Wedbush. “If tariffs had risen on Sunday, this could have led to a drop of more than 10% in some chip stocks in the coming months, as trading problems would have an impact on their profits.” Trade peace: Trump, China announce “phase one” trade deal President Donald Trump and China said Friday that they have agreed to a “limited” phase 1 trade deal, including the lifting of new tariffs. U.S. and Chinese officials gave few details on other aspects of the agreement.