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Dow Jones Taps New Record-Highs as Trump Hints Trade Deal is Imminent

Dow Jones
Dow Jones

The Dow Jones tapped a new record-high in yesterday’s trading as US President Donald Trump hinted that a US-China trade deal is imminent. The US’ blue-chip stock index rallied to a high of 28,231.3 before it finished the day with a 220.8-point or 0.79% gain at 28,132.1.

25/30 Stocks Finish in the Green

Out of the thirty stocks tracked by the Dow Jones, twenty-five shares finished in the green. Gains were led by Cisco which was up by 3.14%. The rally in the stock was mostly propelled by news that the network equipment giant will soon sell chips as it launched Cisco Silicon One.

In second was JPMorgan Chase at 2.86%. Dow Chemical was in third with a 2.54% profit.

On the other hand, losses were led by Boeing which was down -1.06% as the Federal Aviation Administration warned about the company against pushing the return of its 737 Max air crafts. The other losers were Disney (-0.48%), Proctor & Gamble (-0.07%), 3M (-0.11%), and Merck (-0.02%).

Risk Appetite was Driven by Trump Tweet

Investor sentiment picked up on US President Donald Trump’s tweet which hinted that the US and China may soon announce a deal. According to his tweet, both parties want a deal signed “badly.” There were also reports that the US has agreed to roll back existing tariffs and scrap additional levies before the December 15 deadline. Meanwhile, China has reportedly agreed to buy up to 50 billion dollars worth of agricultural goods from the US.

We have yet to hear an official statement from the White House and Beijing. According to a few market participants, we should hear an announcement sometime during the US session today. If this turns out to be the case, we could see US equities extend their gains even further.

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US Consumer Spending Data Due Today

The retail sales reports for November are also scheduled from the US today. At 1:30 pm GMT, the headline figure is expected to post a 0.5% uptick. Meanwhile, the core reading which excludes volatile items is eyed at 0.4%.

Better-than-expected figures may also be bullish for the Dow Jones and could help sustain its rally above the 28,000 psychological handle. They would indicate that the recent surge in job growth in the US has translated to more consumer spending.

Dow Jones Outlook

Should risk aversion or negative data hit headlines later today, we could see the Dow Jones retrace some of its gains to support around its July and September highs around 27,262.5.