-China trade talks were going well lifted stocks Friday as traders also took heart in positive signals over a possible deal to smooth Britain's exit from the European Union.
"The markets still seem to be traveling with a glimmer of optimism", said Ray Attrill, head of FX strategy at National Australia Bank, with one possibility a deal that staves off USA tariff rises in return for agricultural purchases by China. And I think they'd like to make a deal very badly.
U.S. duties on $250 billion in Chinese imports are due to rise in five days while relations deteriorated through the week.
Trump is expected to meet with China's top trade official at 2:45 p.m. ET in the Oval Office.
Hopes of an "interim deal" have increased along with a proposed ceasefire to the tit-for-tat tariffs after the opening exchanges between US Treasury Secretary Steve Mnuchin, Trade Representative Robert Lighthizer and China's Vice-Premier Liu He.
Markets were buoyed on Wednesday by media reports that Beijing will propose a partial deal to prevent further escalation.
Chinese officials are offering to increase annual purchases of USA agricultural products as the two countries seek to resolve their trade dispute, the Financial Times reported on Wednesday, citing unidentified sources.
Even a partial win would be a boon for Trump, who faces an impeachment firestorm and stinging criticism in Congress for his treatment of Kurdish allies in Syria, only the latest episodes of the White House's perpetual turmoil.
"Big day of negotations with China".
The two sides have been at loggerheads over U.S. demands that China improve protections of American intellectual property, end cyber theft and the forced transfer of technology to Chinese firms, curb industrial subsidies and increase United States companies' access to largely closed Chinese markets.
Negotiators could agree to low-level "early harvest" agreements on issues such as currencies and copyright protections, despite increased irritants between the world's two largest economies, a US Chamber of Commerce official briefed by both sides said yesterday. The question is do I want to make a deal.
China's purchases of United States soybeans jumped in September after stagnating during the summer.
"It will be much easier now for American farmers to be able to ship to China", he said. "It requires a lot of preparation work and consensus on both sides". U.S. central bankers believe the trade war is raising the chances the United States could slip into recession, according to a readout released Wednesday from last month's Federal Reserve policy meeting. A key manufacturing index last week fell to its lowest mark in a decade, business investment has turned negative and Senate Majority Leader Mitch McConnell (R-Ky.) has called for bringing the talks to a conclusion "soon" to ease the burden on rural America.
And if that slump persists, layoffs could soon follow, eroding consumer spending and dragging growth down with it, according to the Fed's minutes.
For more than a year, the United States and China have been locked in a trade war on issues such as cybersecurity, regulations, intellectual property, subsidies and tariffs. There is not a very big price increase, if any because they've eaten the tariffs.
"Every month that these trade talks continue, there's more and more friction in the relationship".