The market was already up quite a bit on the day thanks to earnings from Lowe’s (LOW) and Target (TGT), but had hit a ceiling. When headlines about the President’s comments hit the tape, that ceiling broke.
Of course, it takes two to make a deal, and it’s unclear if China is ready to make one and under what conditions. “When dealing with a fickle negotiating partner who may change his mind at any moment, it could well be safer for China to wait for a full agreement than to implement each individual agreement as it is reached,” writes Nomura’s Richard Koo. “In the longer run, China needs to reach an agreement with the US in order to escape the so-called middle-income trap, but in the near term its autocratic government is probably better capable of withstanding a variety of shocks.”
But those are concerns for another day.
Markets Now is a quick take on what’s happening with the Dow Jones Industrial Average and other major market indexes. Don’t forget to check out the rest of Barron’s markets coverage.