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Dow Jones and S&P 500 compensated the loses and ended November on green

Wall Street markets ended Friday trading optimistically, compensating the loses during the month.

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Wall Street markets ended Friday trading optimistically after a Chinese official said that the US and China found common positions on trade before a key meeting between President Donald Trump and his Chinese counterpart, Xi Jinping.

The blue-chip index Dow Jones Industrial Average Blue Index rose by 200 points to 25,538.46 points. Thus, the index marks a weekly increase of 4.8% or 1,174.33 points. The session was also last for November and thanks to the growth during the week, the blue-chip index compensated the negatives accumulated during the month and finished with a growth of 157.72 points.

Dow November

The broader index S&P 500 ended the session with a growth of 22.41 points, or 0.82%, to 2,760.17 points. The index was also positive during the week with growth of 110.22 points, while growth for the moth was 19.80 points.

SP500 November

The technology index Nasdaq Composite ended the Friday trading with a growth of 57.45 points, or 0.79%, to 7,330.54 points. The index accumulated increase of 304.04 points for the week, but in November is on red with a decrease of 26.45 points.

Meanwhile, the consensus in US-China trade talks is steadily rising. The differences between the two countries remain, but investors hope for the end of the trade war during the G-20 summit in Argentina. The news launches stock prices to their highest daily levels, wiping out earlier losses.

Donald Trump and Xi Jinping will have a common dinner on Saturday and are expected to discuss trade relations between the two countries.

In the bond markets, the yield on government securities fell in anticipation of the G20. The yields on 10-year government bond declined to 3.011%, and 30-year government securities dropped to 3.308%.

Why US-China trade tension is important for the markets?

The US-CHina trade war is one of the main obstacles to the growth of the world economy. According to the statistics, 57 companies in the S&P 500 earn more than 10% of their sales revenue in China. The list is dominated by technology giants such as Qualcomm, Texas Instruments, Nvidia, Apple, and Microsoft.

Some consumer companies also staked seriously on the Asian side. Tiffany, McDonald’s, Starbucks, Nike – all make more than 10% of their sales in China.

And not only the technology and consumer companies will be affected by the escalation of the commercial tension, but also the producer of boilers A.O. Smith, the auto parts maker Aptiv, as well as Boeing, Chevron and 3M, which all make at least 10% of their sales in China.

It is still unclear what the long-term consequences of the trade war between the two largest economies in the world will be. But some international companies have already warned that the growth of the Chinese economy is slowing down, damaging US companies operating there as well.

All of these companies can face serious challenges if the Chinese government decides to seriously address a future escalation in the conflict, even more so that Chinese consumers can stop buying US products.

WTO reform

As leaders of the world’s top economic powers seek to defuse tension over the US President Donald Trump’s protectionist trade policies, they will search for common ground on reforms to end a crisis at the institution that was created to prevent economic disputes escalating into war.

The World Trade Organization is on the verge of becoming dysfunctional, just when it is most needed to fulfill its role as an umpire in trade disputes and as the watchdog of global commerce.

The representatives of the G-20 countries have agreed to carry out the necessary restructuring in the World Trade Organization (WTO) to adopt common rules to be respected. Negotiators from the parties have agreed to draft a final communique at the G20 summit in Buenos Aires.

The main reason for this is the pressure from the US, which continues to claim that the international trading system is not working properly.

“We reiterate that trade is beneficial for utility, innovation, growth, and employment, and we reiterate that the multilateral trading system is the framework in which we are all working and committed”, says the statement of the European officials. They added that issues such as fighting climate change and the US duties on steel and aluminum, as well as migration, were also discussed during the meeting.