U.S. stocks are recovering some of their losses Monday after a sharp selloff in weekend pre-market trading. The positive market moves come after President Donald Trump appeared to back off on his threat to order U.S. companies out of China.
China appeared more interested in getting back to the negotiating table over the weekend, with ongoing discussion as the 45th G7 summit, which is being held currently in Biarritz, France.
Vice Premier Liu He, who is President Xi Jinping’s top economic adviser, said, according to a government transcript, “We are willing to resolve the issue through consultations and cooperation in a calm attitude and resolutely oppose the escalation of the trade war.”
“We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world,” Liu added.
Stocks responded after Liu explained that U.S. companies are especially welcome in China, and will be treated kindly.
“We welcome enterprises from all over the world, including the United States, to invest and operate in China,” he added.
“We will continue to create a good investment environment, protect intellectual property rights, promote the development of smart intelligent industries with our market open, resolutely oppose technological blockades and protectionism, and strive to protect the completeness of the supply chain.”
The SPDR S&P 500 (SPY) and the SPDR Select Sector Fund Financial (XLF), which were both in negative territory prior to the latest comments from Liu, have rallied back and are up 0.61% and 0.31% respectively this morning. The Invesco QQQ Trust (QQQ) is up almost 1% on the news.
President Trump seemed encouraged by the news as well, claiming that trade negotiations are back on track, at least for the time being.
“China called last night our top trade people and said ‘let’s get back to the table’ so we will be getting back to the table and I think they want to do something. They have been hurt very badly but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world,” Trump said.
“I think we are going to have a deal,” he added. “They have supply chains that are unbelievably intricate and people are all leaving and they are going to other countries, including the United States by the way, we are going to get a lot of them too.”
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