After the new records on Friday, the week began on a hesitant note on Wall Street, where the mood of investors remains completely subject to rumors often conflicting about the progress of negotiations for an agreement between the United States and China. After the hopes of the last days, the channel ‘CNBC’ threw a cold on Monday evoking a climate “pessimistic” on the Chinese side, because of the reluctance of Donald Trump to lift the customs barriers already in place for 16 months.
At closing, however, the three leading indexes managed to close near new historical records. The Dow Jones gained 0.11% to 28,036 points, while the broad S & P 500 index advanced 0.05% to 3,122 points, and the Nasdaq Composite, rich in technology and biotechnology stocks, gained 0.11%, at 8.549 points.
Last week, the three indices rose by 1.2%, 0.87% and 0.96% respectively. For the S & P 500, it was the 6th consecutive weekly advance, a first for two years. While last week ended with the hope there will be a swift trade agreement between Washington and Beijing, doubts once again emerged on Monday.
During the weekend, China’s official Xinhua news agency reported that Vice Prime Minister Liu He, China’s chief negotiator, had a “constructive” telephone conversation on Saturday with US Trade Representative Robert Lighthizer and the Treasury Secretary Steven Mnuchin.
The thorny issue of lifting existing taxes had already been mentioned by the press last week, weighing Friday on the dollar, which continued its slide Monday, while conversely, gold and bonds have been sought as safe havens.
On Monday, Cleveland Fed President Loretta Mester, speaking in public, was optimistic about the US economic outlook. She, like Jerome Powell, defended the scenario of a pause on key rates, believing that the central bank could now wait and observe the changing economic situation.
The oil went down again Monday, amid doubts about the US-China trade agreement, but also after the valuation of Aramco, the Saudi oil giant, came out below expectations for its IPO at the Riyadh Stock Exchange. The price of a barrel of US crude oil (WTI) fell Monday by 1.52% to $56.86 on the Nymex (December futures contract), while the Brent North Sea lost 1.36% at $62.44 (January futures contract).
Aramco announced Sunday a price range for its IPO, which values the company between $1,600 and 1,700 billion, below the $2,000 billion initially targeted in 2016 by Crown Prince Mohamed bin Salman. Aramco plans to sell 1.5% of its capital which at the top of the range could bring more than $25 billion to the Saudi state.
The ounce of gold rose 0.24% Monday on the Comex market, to $1,472 for the December futures. The yellow metal has stabilized since last week, after suffering a sharp correction of 3% the previous week