Wall Street is confident vis-à-vis Trump, recovered


by Sinéad Carew

NEW YORK (Reuters) – Wall Street ended the first session of the week on a good rise, investors thinking that the president, Donald Trump will return on its threat to impose substantial tariffs on steel and aluminum.

Strategists have also highlighted the rise in oil prices and fears ranging in attenuating the outcome of the Italian parliamentary election.

Oil prices have finished sharply higher Monday on the new york’s market Nymex, supported by expectations of strong demand growth and by the feeling that Opec will not be able to increase its production capacity.

The three major stock indices returned to the top during the session as investors see more in this threat a weapon of negotiation after that, Trump was suggested that Mexico and Canada might not be affected by these customs duties if these two countries would agree to renegotiate the free trade agreement north american (Nafta) following more favourable terms in the United States.

In addition, the republican chairman of the House of representatives Paul Ryan urged Donald Trump to refrain from erecting these new customs barriers and the chairs of parliamentary committees have invited the american president to take measures targeted and not general.

“There is a tendency more and more to believe that all this will not take place”, said Jeffrey Carbone (Cornerstone Financial Partners).

The fact that other countries have not taken retaliatory measures specific against the United States has also relieved the stock Exchange, has found Mona Mahajan (Allianz (DE:ALVG) Global investors). “Let’s hope that this will become a non-event to focus again on the economy and rates”.

The announcement last week of the project of the White House to impose customs duties of 25% on imported steel and 10% aluminum imported had caused the stall of a stock market already made uncomfortable by the rising interest rates and bond returns.

Trump may have backtracked on the pressure of investors, considers Art Hogan (B. Riley FBR), who believes that the government “sees in the Stock market a barometer of his success and until now, the market says that a trade war is not a good idea”.

The Dow Jones has gained 336,70 points (1,37%) – to 24.874,76 points. The S&P-500 took 29,69 points (1.1 per cent), 2.720,94 points. The Nasdaq Composite has advanced its side of 72,84 points (1%) 7.330,71 points.

The 11 major sectoral indices all finished in the green, the first of which are the “utilities” (+1,95%) followed by financial stocks (+1,37%).

The values, the insurer XL Group has increased more than 29%, as a result of its acquisition by Axa (PA:AXAF) to 12.4 billion euros.

The volume was 6,91 billion shares traded, below the average of 8.3 billion in the past 20 sessions.

On the foreign exchange market, the euro is headed upwards after a brief release following the vote undecided Italian.

As in Germany, on the contrary, uncertainty has been lifted: the members of the social democratic Party (SPD), approved by 66% of the coalition agreement with the bloc, conservative Angela Merkel (CDU-CSU), paving the way for the formation of a government in Germany, more than five months after the general elections.

The two events taken together have not changed the opinion of the investors on the strength of the economy of the euro area, even if the political risk is again in the line of fire after the Italian elections.

The last events of the business case in the United States, and the rise of the Stock market have logically resulted in an increase in Treasury yields.

But these returns are not out of their forks the last week.

(With Rodrigo Campos in New York, Ankur Banerjee and Sruthi Shankar in Bangalore; Richard Leong and Kate Duguid; Wilfrid Exbrayat for the French service)

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