World shares gain amid calm over US-China trade row

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Shares rebounded in Europe and Asia on Friday as worries over U.S.-China trade friction were calmed by conciliatory comments from Beijing.

KEEPING SCORE: Germany‘s DAX climbed 0.7 percent to 10,884.39 and the CAC 40 in France advanced 1.3 percent to 4,840.54. Britain’s FTSE 100 jumped 1.6 percent to 6,809.58. The Dow future contract fell 0.5 percent to 24,783.00 and the contract for the S&P 500 lost 0.6 percent to 2,676.00, auguring a glum start to trading.

THE DAY IN ASIA: Japan’s benchmark Nikkei 225 added 0.8 percent to 21,678.68, and Australia’s S&P/ASX 200 gained 0.4 percent to 5,681.50. South Korea’s Kospi rose 0.3 percent to 2,075.76. Hong Kong’s Hang Seng gave up 0.3 percent to 26,063.76, while the Shanghai Composite was flat at 2,605.89. Shares rose in India, Taiwan and Southeast Asia.

BONDS WEIGH: Traders have continued to shovel money into bonds, a signal that they see weakness in the economy ahead. The yield on the 10-year Treasury note fell to 2.88 percent from 2.92 percent on Tuesday. Investors have worried that the Fed might overshoot with its campaign of rate increases and put the brakes on the U.S. economy. The tariffs war with Beijing is likewise casting a shadow over the outlook for a wide range of industries.

FED WATCH: Last week, stocks jumped after Fed Chairman Jerome Powell indicated the central bank might consider a pause in rate hikes next year while it gauges the impact of its credit tightening program. The Fed has raised rates three times this year and is expected to boost rates for a fourth time at its Dec. 18-19 meeting of policymakers. At the same time, there has been growing evidence that global economic growth is slowing.

TRADE WATCH: Despite skepticism over the trade truce Presidents Donald Trump and Xi Jinping reached last weekend in Buenos Aires, Argentina, Beijing has signaled it intends to go ahead with talks meant to resolve the dispute. The arrest of Meng Wanzhou, chief financial officer of telecoms network supplier Huawei Technologies, has driven home why it will be so hard for the Trump administration to repair its deepening conflict with China. The U.S. Commerce Department reported Thursday that the gap between what the U.S. sells and what it buys from foreign countries hit $55.5 billion in October while the touchy deficit with China rose 7.1 percent from a year earlier to a record $43.1 billion.

ANALYST’S VIEWPOINT: Since Trump and Xi’s agreement, “both sides have issued vague and differing statements on the ongoing trade negotiations, and the arrest of a leading Chinese tech executive will add another layer of complication to the current situation. Trump’s self-proclamation of being the “Tariff-man” earlier this week also lead investors to question if both parties will be able to reach an agreement during the 90-days truce period,” Jayden Loh of IG said in a commentary.

ENERGY: U.S. benchmark crude fell 12 cents to $51.37 a barrel in electronic trading on the New York Mercantile Exchange. It dropped 2.6 percent to $51.49 a barrel in New York. Brent crude, used to price international oils, dipped 7 cents to $59.99.

CURRENCIES: The dollar rose to 112.82 yen from 112.80 yen. The euro strengthened to $1.1376 from $1.1345.

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Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama

On Instagram at https://www.instagram.com/yurikageyama/?hl=en





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