Overseas Market Report
A broad-based rally has pushed the S&P 500 and the Nasdaq to record high closes for the second straight session as a trade agreement reached between the US and Mexico buoyed investor sentiment. Technology stocks led the Nasdaq above the 8,000 mark for the first time, and the sector provided the biggest boost to the S&P 500.
A senior US trade official on Monday announced a deal with Mexico to replace the North American Trade Agreement and said talks with Canada were expected to begin immediately. The upbeat trade outlook was further boosted by news that Washington was pressuring the EU to accelerate tariff talks.
Disputes between the US and its trading partners have been a drag on investor sentiment for much of the year despite solid economic fundamentals and two robust quarters of corporate earnings. “It takes a long time for people to come out of the concerns related to those thousand-point down days and feel a little bit more comfortable,” said Robert Pavlik, chief investment strategist at SlateStone Wealth in New York. “And the trade concerns and the tariffs, that played a part in it, that’s what held it back,” he added. “People are feeling a little bit more positive.”
Matt Blunt, president of the American Automotive Policy Council, said he was optimistic about the trade deal. Shares of Ford Motors were up 3.2 per cent while General Motors rose 4.8 per cent. Tariff-sensitive companies Boeing and Caterpillar were up 1.2 per cent and 2.8 per cent, respectively, leading the industrial sector’s advance and pulling the Dow higher
Morning Market Note - Tuesday 28th August