The Dow Jones Industrial Average jumped 450 points in pre-market trading after a purported "truce" in trade hostilities between China and the United States at the G-20 summit. The White House announced it will delay a scheduled tariff hike of $200 billion in Chinese goods that was set to take effect on Jan. 1. China has agreed to not raise tariffs on U.S. goods at the New Year deadline as well.
In addition, U.S. President Donald Trump tweeted this morning that China has agreed to slash tariffs on U.S.-made automobiles. Oil prices popped as much as 5% on optimism from the truce, which is a stark change in policy after months of escalating tensions between the world's top two economies. Markets hope that a deal will restore confidence in global growth and restore stability at a time that markets are teetering.
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
Now, here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.
The Top Stock Market Stories for Monday
- Speaking of oil, OPEC is under significant pressure to survive after one of its oldest members announced plans to depart the world's largest energy cartel. The natural gas-rich nation of Qatar said it will depart OPEC at the end of the year after 60 years of membership. Country leaders said that the country wants to expand natural gas production; however, it has been at the mercy of the direction of Saudi Arabia, the cartel's largest oil producer. Qatar currently produces 600,000 barrels of oil per day.
- Over the weekend, President Trump celebrated the signing of a new trade deal between the United States, Mexico, and China. Trump said he plans to withdraw from the 25-year-old North American Free Trade Agreement (NAFTA), just days after signing the U.S.-Mexico-Canada Agreement with the leaders of those two nations. The decision will give Congress just six months to ratify the new trade agreement or return to economic terms that predate the continental NAFTA deal.
- On Friday evening, former U.S. President George H.W. Bush passed away at the age of 94 at his residence in Houston. The 41st president will lie in state at the Capital Rotunda for two days before his burial at his presidential library at Texas A&M University. President Trump has designated Wednesday as a day of national morning. The U.S. markets will be closed as a result.
Stocks to Watch Today: NXPI, CAT, F, GM, FCAU
- Shares of NXP Semiconductors NV (NASDAQ: NXPI) rallied on news that the United States and China struck a temporary deal on trade. Analysts are speculating that the improved dialogue between the U.S. and China could press President Xi Jinping to approve a deal that would allow Qualcomm Inc. (NASDAQ: QCOM) to buy NXP.
- Shares of Caterpillar Inc. (NYSE: CAT) popped after Bank of America/Merrill Lynch analysts hiked the stock's rating from neutral to "Buy." Analysts say that macroeconomic risks have abated in the wake of the Fed's dovish approach on interest rates and news of a short-term deal between the United States and China.
- Shares of General Motors Co. (NYSE: GM) popped nearly 4% after China agreed to cut tariffs on American cars. Automotive rivals Fiat Chrysler Automobiles NV (NYSE: FCAU) added 3%, while Ford Motor Co. (NYSE: F) added 2.8% on the news. Automotive stocks also received a boost from the initial signing of the USMCA.
- Look for an earnings report today from Finisar Corp. (NASDAQ: FNSR).
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.