Investors into China were reportedly rallying for a pre-Christmas opportunity after trade war tensions between China and the US eased up. A report claimed that the said trade war developments have pushed share prices to increase, the highest yield in a decade.
After US President Donald Trump announced that his country would impose lower tariff rates on Chinese imports under certain conditions, the Morgan Stanley Capital International (MSCI) gauge of global stock markets reached a new record high level.
The completion of phase one of the trade deal between China and the US has boosted share prices in Wall Street wherein both S&P 500, which is a measure of the performance of US's leading companies, including the tech-forum Nasdaq traded at unprecedented levels this month.
The report claimed that the MSCI increase was pegged at a three percent increase in December 2019 and that it may increase further by 2020 due to the de-escalation of the protectionist stand-off between China and the US. Moreover, it was also reported that Britain would not partake in the chaotic exit of the European Union with its trade deals with China and the US as well.
It was forecasted that the MSCI index is up by 23 percent this year which is the best performance yet since the year 2009. According to the chief market economist at Spartan Capital Securities in New York Peter Cardillo, the stock markets were driven by developments from the China-US trade deal and that investors are hoping to win big with this improvement.
He claimed that there is a rally in the stock markets wherein there is a huge momentum in buying shares this month. He also claimed that stocks have marked up and that the same momentum would continue up until the end of 2020.
The report also indicated that the move of foreign investors drew contrast towards Donald Trump's confrontational speech about its dealings with Beijing. It was reported that his speech promised a cut on tariff rates on Chinese imports and duties on products including frozen pork and semiconductors, a leading commodity in the tech industry.
It was also revealed that the swine flu outbreak that hurt the Chinese economy is slowly recovering. Thus, the cut on import tariff rates on imported pork would aid China to recover faster from the epidemic. It was also revealed that China, too, was willing to minimize the cost of its goods to be exported to the US which would benefit the global economy and improve the country's growth rate in the next 30 years.
