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Car shares surge after US-China trade truce, as UK factories stockpile for Brexit - business live Markets rally as Trump hails 'extraordinary' trade talks with China - business live
(35 minutes later)
US treasury secretary Stephen Mnuchin is also cheering the trade war truce.
Speaking on CNBC a few moments ago, Mnuchin says that the 90-day hiatus is a significant step:
This is the first time that we have a commitment from them that this will be a real agreement.
However...Mnuchin added that Beijing to follow through on its commitments, and open its economy more widely, and fairly, to US companies:
“They put on the table an offer of over $1.2 trillion in additional commitments. But the details of that still need to be negotiated.
This isn’t just about buying things. This is about opening markets to U.S. companies and protecting U.S. technology. Those are very important structural issues to the president.”
Treasury Sec. Mnuchin tells CNBC he is 'hopeful' they can turn Trump-Xi discussions into real trade agreement https://t.co/VnZ4mpxWmP
More optimism from the White House:
President Xi and I have a very strong and personal relationship. He and I are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations. A solution for North Korea is a great thing for China and ALL!
The US president is awake, and in an effusive mood after his negotiations with Xi Jinping on Saturday night.
Donald Trump is tweeting that the trade truce can be a win for both the US and China -- a point analysts have also made today.
My meeting in Argentina with President Xi of China was an extraordinary one. Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!
Farmers will be a a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants. Farmers, I LOVE YOU!
Salman Ahmed, chief investment strategist at Lombard Odier IM, agrees that Trump and Xi made a breakthrough:
“The much anticipated dinner between the two leaders resulted in the first major breakthrough since talks broke down in May. For now, China has agreed to buy more US products, including agricultural goods, and to tackle the trade imbalance concern. President Xi also agreed to designate fentanyl a controlled substance, in a move which was described as a “wonderful humanitarian gesture” in a statement issued by the White House on Saturday.
“On trade, President Trump said the US will not go ahead with the implementation of a 25% tariff rate scheduled for January. The tariffs on $200 billion worth of products will be left at the 10% rate for the next 90 days while both parties attempt to negotiate structural changes.
“Signs of rapprochement between China and the US is certainly good news. This does not reflect a definitive shift in the relationship between the US and China, but the opening up of negotiations is certainly a big step in the right direction.
Stephen Cooper, Head of Industrial Manufacturing at KPMG UK, is concerned by today’s UK factory data (even though anxious stockpiling drove growth up):
“Brexit and supply chain worries have dented November’s UK manufacturing data, with muted growth and optimism at a 27-month low.
“The continued decline in export orders is something manufacturers need to be mindful of, particularly as the Eurozone’s Manufacturing PMI numbers for last month were relatively flat and there are are also wider global demand concerns. With the Eurozone as such an important market for the UK, manufacturers need to prepare carefully for Brexit and ensure they understand every aspect of their supply chains.”
Washington agreed to postpone by 90 days the increase in tariffs from 10% to 25% on $200bn of Chinese goods, due to kick in on 1 January, while China pledged to import more US products, including – according to Washington – farm, energy and industrial products. This should help shrink the US trade deficit with China.Washington agreed to postpone by 90 days the increase in tariffs from 10% to 25% on $200bn of Chinese goods, due to kick in on 1 January, while China pledged to import more US products, including – according to Washington – farm, energy and industrial products. This should help shrink the US trade deficit with China.
Trump tweeted that China had also agreed to “reduce and remove” tariffs on US car imports from the current 40% level but there was no confirmation from Beijing.Trump tweeted that China had also agreed to “reduce and remove” tariffs on US car imports from the current 40% level but there was no confirmation from Beijing.
No – this is seen as a temporary respite in the trade spat between Washington and Beijing, which started in June after talks broke down. It will buy both sides more time to negotiate. The White House says there will also be immediate discussions on issues such as intellectual property protection, non-tariff trade barriers and cyber theft.No – this is seen as a temporary respite in the trade spat between Washington and Beijing, which started in June after talks broke down. It will buy both sides more time to negotiate. The White House says there will also be immediate discussions on issues such as intellectual property protection, non-tariff trade barriers and cyber theft.
Yes – there was no joint communique and few details have emerged so far. Some analysts say the deal only kicks the can down the road and tensions will resurface in three months.Yes – there was no joint communique and few details have emerged so far. Some analysts say the deal only kicks the can down the road and tensions will resurface in three months.
The Chinese economy is cooling and the Shanghai stock market has fallen almost 30% since the start of the year. A survey showed on Monday that new export orders at China’s factories extended their decline in November as the trade war took its toll.The Chinese economy is cooling and the Shanghai stock market has fallen almost 30% since the start of the year. A survey showed on Monday that new export orders at China’s factories extended their decline in November as the trade war took its toll.
While Trump’s tough stance is popular with his Republican supporters, the US trade deficit with China has worsened. General Motors, the largest US carmaker, announced last week it would halt production at five North American factories and cut 14,700 jobs, a decision partly prompted by the impact of Trump’s tariffs.While Trump’s tough stance is popular with his Republican supporters, the US trade deficit with China has worsened. General Motors, the largest US carmaker, announced last week it would halt production at five North American factories and cut 14,700 jobs, a decision partly prompted by the impact of Trump’s tariffs.
The trade truce came as a positive surprise to markets after Trump’s combative comments in the past fortnight. The rally shows how sensitive global markets are to trade tensions. Julia KolleweThe trade truce came as a positive surprise to markets after Trump’s combative comments in the past fortnight. The rally shows how sensitive global markets are to trade tensions. Julia Kollewe
Here’s a handy chart showing how the trade dispute intensified this year, as the US and China exchanged tit-for-tat tariffs.Here’s a handy chart showing how the trade dispute intensified this year, as the US and China exchanged tit-for-tat tariffs.
pic.twitter.com/HrI8MRx2YWpic.twitter.com/HrI8MRx2YW
Tony Fratto, a former White House deputy press secretary, will believe China’s tariff cuts when he sees them....Tony Fratto, a former White House deputy press secretary, will believe China’s tariff cuts when he sees them....
I know not everyone follows trade very closely, but try the Google machine from time to time. This isn’t the first time Xi has promised to reduce auto tariffs. It’s probably not the last time, either.I know not everyone follows trade very closely, but try the Google machine from time to time. This isn’t the first time Xi has promised to reduce auto tariffs. It’s probably not the last time, either.
Influential investor Mohamed A. El-Erian of Allianz reckons the US-China trade truce is a quadruple win, at least in the short term.Influential investor Mohamed A. El-Erian of Allianz reckons the US-China trade truce is a quadruple win, at least in the short term.
He writes:He writes:
At the end of almost three hours of what the White House called “highly successful” discussions, the U.S. agreed to refrain for 90 days from implementing additional tariffs on $200 billion of imports from China. In return, China promised to use the time to make progress in three areas of concern to the U.S. and other countries: relaxing an array of nontariff barriers, including joint-venture requirements, that result in forced transfers of technology, operational models and other proprietary information and business practices; combatting intellectual property theft and other cyber interferences; and reducing the bilateral trade surplus by importing “very substantial” quantities of certain goods from the U.S.At the end of almost three hours of what the White House called “highly successful” discussions, the U.S. agreed to refrain for 90 days from implementing additional tariffs on $200 billion of imports from China. In return, China promised to use the time to make progress in three areas of concern to the U.S. and other countries: relaxing an array of nontariff barriers, including joint-venture requirements, that result in forced transfers of technology, operational models and other proprietary information and business practices; combatting intellectual property theft and other cyber interferences; and reducing the bilateral trade surplus by importing “very substantial” quantities of certain goods from the U.S.
This outcome is a short-term win for both sides, as well as the global economy:This outcome is a short-term win for both sides, as well as the global economy:
China avoids additional tariffs that would further undermine its growth prospects and place even greater pressure on its financial markets. The U.S. defines a time-specific way forward to counter practices that place it at a competitive disadvantage in its bilateral economic relationship with China. And the world economy is in a better place, for now, to avoid a stagflationary trade war.China avoids additional tariffs that would further undermine its growth prospects and place even greater pressure on its financial markets. The U.S. defines a time-specific way forward to counter practices that place it at a competitive disadvantage in its bilateral economic relationship with China. And the world economy is in a better place, for now, to avoid a stagflationary trade war.
It is also a short-term win for investors and markets:It is also a short-term win for investors and markets:
El-Erian adds that the world economy would have suffered if the talks had broken down. However, both sides now have to work “cooperatively” to turn this truce into a long-term deal.El-Erian adds that the world economy would have suffered if the talks had broken down. However, both sides now have to work “cooperatively” to turn this truce into a long-term deal.
There’s also a danger that the new 90-day deadline creates fresh political pressures, which will weigh on markets in early 2019.There’s also a danger that the new 90-day deadline creates fresh political pressures, which will weigh on markets in early 2019.
Thoughts on why the #G20 weekend is an immediate win x 4 — for the #US, #China, the global #economy and #markets.Beyond the immediate, there’s a pathway for consolidating gains but it’s far from certain.https://t.co/JKnI1X38Li@bopinion @business @realdonaldtrump #Xi #ArgentinaThoughts on why the #G20 weekend is an immediate win x 4 — for the #US, #China, the global #economy and #markets.Beyond the immediate, there’s a pathway for consolidating gains but it’s far from certain.https://t.co/JKnI1X38Li@bopinion @business @realdonaldtrump #Xi #Argentina
The trade war time-out may come too late for some American farmers.The trade war time-out may come too late for some American farmers.
As this chart shows, soybean exports from the US to China usually peak in October and November, but not this year due to the trade dispute.As this chart shows, soybean exports from the US to China usually peak in October and November, but not this year due to the trade dispute.
News that #China and the #US are to resume trade talks provides some reprieve for commodity prices. However, it is unlikely that Chinese purchases of US #soybeans surge as a result of the latest truce. #G20Summit Clients can read more:https://t.co/sMLPzYn8Ga pic.twitter.com/RE5ep1kQP4News that #China and the #US are to resume trade talks provides some reprieve for commodity prices. However, it is unlikely that Chinese purchases of US #soybeans surge as a result of the latest truce. #G20Summit Clients can read more:https://t.co/sMLPzYn8Ga pic.twitter.com/RE5ep1kQP4
Wang Cun, director of the China Automobile Dealers Association’s import committee, has welcomed the suggestion that car tariffs will be cut.Wang Cun, director of the China Automobile Dealers Association’s import committee, has welcomed the suggestion that car tariffs will be cut.
Wang told reporters in Beijing that:Wang told reporters in Beijing that:
If they cancel the extra 25 percent tariff on US-made cars, then we will see positive signs for imported cars,”If they cancel the extra 25 percent tariff on US-made cars, then we will see positive signs for imported cars,”
Wall Street is on track for a big jump when trading begins in three and a half hours.Wall Street is on track for a big jump when trading begins in three and a half hours.
The Dow Jones is currently up 2%, or 500 points, in the futures market.The Dow Jones is currently up 2%, or 500 points, in the futures market.
That’s a chunky move, given the US and China have only agreed a 90-day truce....and there’s been silence from Beijing about exactly what they’ve agreed too....That’s a chunky move, given the US and China have only agreed a 90-day truce....and there’s been silence from Beijing about exactly what they’ve agreed too....
If a two-month delay is worth 500 points for the Dow (judging by futures action), what would an actual agreement be worth? https://t.co/BCvhKmdOLpIf a two-month delay is worth 500 points for the Dow (judging by futures action), what would an actual agreement be worth? https://t.co/BCvhKmdOLp
Shares in European car companies are surging, after Donald Trump tweeted that China has agreed to cut tariffs on auto imports.Shares in European car companies are surging, after Donald Trump tweeted that China has agreed to cut tariffs on auto imports.
Daimler are leading the pack, up 7%, in Germany followed by BMW (+6.6%) and Volkswagen (+4%). They all have factories in the US, so should benefit from a cooling in trade war tensions. Tire maker Continental is up 3.5%.Daimler are leading the pack, up 7%, in Germany followed by BMW (+6.6%) and Volkswagen (+4%). They all have factories in the US, so should benefit from a cooling in trade war tensions. Tire maker Continental is up 3.5%.
Shares in fashion chain Ted Baker have plunged by 13% this morning after the company’s founder was accused of forcing staff into hugs, massages and other inappropriate conduct.Shares in fashion chain Ted Baker have plunged by 13% this morning after the company’s founder was accused of forcing staff into hugs, massages and other inappropriate conduct.
My colleagues Sarah Butler and Jasper Jolly reported yesterday that current and former Ted Baker staff had accused Ray Kelvin of harassment.My colleagues Sarah Butler and Jasper Jolly reported yesterday that current and former Ted Baker staff had accused Ray Kelvin of harassment.
They wrote:They wrote:
More than 60 current or former staff are understood to have come forward to the employee campaigning platform Organise with complaints about Kelvin’s alleged behaviour, including kissing ears and giving unwanted hugs and shoulder massages.More than 60 current or former staff are understood to have come forward to the employee campaigning platform Organise with complaints about Kelvin’s alleged behaviour, including kissing ears and giving unwanted hugs and shoulder massages.
Organise published a petition, signed by more than 1,000 people, calling for an end to forced hugging, saying: “It is part of a culture that leaves harassment unchallenged.” It also calls for new procedures allowing employees to report harassment to an “independent, external body”.Organise published a petition, signed by more than 1,000 people, calling for an end to forced hugging, saying: “It is part of a culture that leaves harassment unchallenged.” It also calls for new procedures allowing employees to report harassment to an “independent, external body”.
Ted Baker says it will investigate the case, adding:Ted Baker says it will investigate the case, adding:
Hugs have become part of Ted Baker’s culture, but are absolutely not insisted upon.”Hugs have become part of Ted Baker’s culture, but are absolutely not insisted upon.”
Shares in the company have fallen to £15.86 (from £18.26), their lowest level since June 2013.Shares in the company have fallen to £15.86 (from £18.26), their lowest level since June 2013.
JUST IN: Ted Baker shares extend losses, now down 10.7 percent after company says it will investigate claims against CEO https://t.co/XdRRhbJOnC pic.twitter.com/aw30b88ZodJUST IN: Ted Baker shares extend losses, now down 10.7 percent after company says it will investigate claims against CEO https://t.co/XdRRhbJOnC pic.twitter.com/aw30b88Zod
Ladies and gentleman -- we have stockpiling! 🏭• UK factory PMI rises much more than expected to 53.1• Even as export orders contract for 2nd month• BUT! IHS Markit says pickup not really down to healthy domestic demand• It's stockpiling• Optimism at 27-month lowLadies and gentleman -- we have stockpiling! 🏭• UK factory PMI rises much more than expected to 53.1• Even as export orders contract for 2nd month• BUT! IHS Markit says pickup not really down to healthy domestic demand• It's stockpiling• Optimism at 27-month low
Newsflash: Britain’s manufacturing was unexpectedly strong last month, as companies rush to stockpile products ahead of a Brexit crisis.Newsflash: Britain’s manufacturing was unexpectedly strong last month, as companies rush to stockpile products ahead of a Brexit crisis.
Markit’s UK factory PMI, which measures activity in the sector, has jumped to 53.1 for November, up from October’s 27-month low of 51.1.Markit’s UK factory PMI, which measures activity in the sector, has jumped to 53.1 for November, up from October’s 27-month low of 51.1.
Most of the demand came from domestic customers amid a rush to fill inventories with important products and components, in case of trade disruption after Brexit.Most of the demand came from domestic customers amid a rush to fill inventories with important products and components, in case of trade disruption after Brexit.
But the export picture is darker -- new orders from overseas shrank for the second straight month in November, the first back-to-back contraction since early-2016.But the export picture is darker -- new orders from overseas shrank for the second straight month in November, the first back-to-back contraction since early-2016.
Rob Dobson, Director at IHS Markit, points out that manufacturers are still quite pessimistic.Rob Dobson, Director at IHS Markit, points out that manufacturers are still quite pessimistic.
“While demand from the domestic market was a positive spur, in some cases as clients built up stocks in response to Brexit and other supply-chain uncertainties, manufacturers also reported a further decrease in new export business as slower global economic growth and Brexit worries took a bite out of foreign demand.“While demand from the domestic market was a positive spur, in some cases as clients built up stocks in response to Brexit and other supply-chain uncertainties, manufacturers also reported a further decrease in new export business as slower global economic growth and Brexit worries took a bite out of foreign demand.
Brexit worries also increasingly dominated the outlook for the sector. Although still forecasting growth for the year ahead, manufacturers’ confidence fell to its lowest ebb since August 2016.”Brexit worries also increasingly dominated the outlook for the sector. Although still forecasting growth for the year ahead, manufacturers’ confidence fell to its lowest ebb since August 2016.”
Overnight, manufacturing group EEF also reported that UK manufacturers have been working hard, stockpiling products ahead a possible cliff-edge Brexit.Overnight, manufacturing group EEF also reported that UK manufacturers have been working hard, stockpiling products ahead a possible cliff-edge Brexit.
UK manufacturers stockpile goods ahead of BrexitUK manufacturers stockpile goods ahead of Brexit
It’s official: Europe’s factory sector slowed last month.It’s official: Europe’s factory sector slowed last month.
Data firm Markit reports that its eurozone manufacturing PMI fell to 51.8 last month, down from 52 in October. That’s the weakest growth since August 2016, and close to the 50-point mark that shows stagnation.Data firm Markit reports that its eurozone manufacturing PMI fell to 51.8 last month, down from 52 in October. That’s the weakest growth since August 2016, and close to the 50-point mark that shows stagnation.
Italy and France were the worst-performing regions:Italy and France were the worst-performing regions:
Netherlands 56.1: 25-month lowNetherlands 56.1: 25-month low
Austria 54.9: 2-month highAustria 54.9: 2-month high
Ireland 55.4: 2-month highIreland 55.4: 2-month high
Greece 54.0: 6-month highGreece 54.0: 6-month high
Spain 52.6: 3-month highSpain 52.6: 3-month high
Germany 51.8 (flash: 51.6) 31-month lowGermany 51.8 (flash: 51.6) 31-month low
France 50.8 (flash: 50.7) 26-month lowFrance 50.8 (flash: 50.7) 26-month low
Italy 48.6: 47-month lowItaly 48.6: 47-month low
#France #manufacturing #PMI signals weakest performance since September 2016 as growth slowdown is exacerbated by demonstration-related disruptions https://t.co/b5wHMaNmOz pic.twitter.com/9E6Hvmoq64#France #manufacturing #PMI signals weakest performance since September 2016 as growth slowdown is exacerbated by demonstration-related disruptions https://t.co/b5wHMaNmOz pic.twitter.com/9E6Hvmoq64
On the upside, it’s better than the initial ‘flash’ estimate released mid-way through the month (51.5).On the upside, it’s better than the initial ‘flash’ estimate released mid-way through the month (51.5).
Unexpected good news for European economy. Manifacturing #PMI rose in November in the Euro area (51,8, expected 51,5), in France (50,8, expected 50,7), in Germany (51,8, expected 51,6). It decreased in Italy (48,6, expected 48,9). @graemeweardenUnexpected good news for European economy. Manifacturing #PMI rose in November in the Euro area (51,8, expected 51,5), in France (50,8, expected 50,7), in Germany (51,8, expected 51,6). It decreased in Italy (48,6, expected 48,9). @graemewearden
UBS analyst Paul Donovan suggests investors shouldn’t get too excited about the US-China trade truce.UBS analyst Paul Donovan suggests investors shouldn’t get too excited about the US-China trade truce.
US President Trump may, metaphorically, be claiming to have a tweet on Twitter that promises trade peace in our time. The reality of the US-China handshake deal at the G20 is not that secure. The deal looks to be a variation on the Juncker-Trump EU handshake deal.US President Trump may, metaphorically, be claiming to have a tweet on Twitter that promises trade peace in our time. The reality of the US-China handshake deal at the G20 is not that secure. The deal looks to be a variation on the Juncker-Trump EU handshake deal.
Unexpected good news for European economy. Manifacturing #PMI rose in November in the Euro area (51,8, expected 51,5), in France (50,8, expected 50,7), in Germany (51,8, expected 51,6). It decreased in Italy (48,6, expected 48,9). @graemeweardenUnexpected good news for European economy. Manifacturing #PMI rose in November in the Euro area (51,8, expected 51,5), in France (50,8, expected 50,7), in Germany (51,8, expected 51,6). It decreased in Italy (48,6, expected 48,9). @graemewearden