U.S.-China Trade Spat: Wall Street Senses a Deal
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What is the main topic discussed in this episode?
Here's your money briefing. I'm J.R. Whalen at The Wall Street Journal in New York.
What is the current impact of the U.S.-China trade dispute on markets?
The ongoing trade battle between the U.S. and China has sent markets on a wild ride. But do Wall Street traders see the dust clearing anytime soon? We'll check in with a Journal of Markets reporter in a moment who looks for specific signals in the markets. First, these money and market stories you should know. In the current booming job market, wages have inched higher for about a year. But in a Federal Reserve survey, one quarter of working people say they have no retirement savings at all. And 44 percent worry that their savings aren't on track. Younger workers aged 18 to 29 have ground to make up as well. Almost half of them say they have nothing set aside, and only 26% believe they are adequately prepared for retirement.
Now, the Fed has been conducting this survey since 2013. It's shown steady improvement in household finances over that time, yet still about 20% of households say they wouldn't be able to pay all their bills during the month of the survey. In most cases, that means they expect to forego making part of their rent, mortgage, credit card, or utility payments.
Which market signals suggest Wall Street expects a trade deal?
Inconsistent work schedules could be partly to blame here. About a quarter of employees have varying work schedules, and they say their schedules change based on their employers' needs, sometimes on short notice. And it's expensive enough to go to the movies, with the ticket, popcorn, and soda prices per person potentially running upwards of $20.
How do fund-manager surveys reflect investor confidence about future profits?
And you may as well be able to trust online movie reviews when going to a theater near you. Rotten Tomatoes says it's now going to require users to verify they've actually seen the movie before bashing it or singing its praises. When someone buys a ticket on Fandango, which by the way owns Rotten Tomatoes, they'll get a verified badge next to their score for the movie. The score will appear on both Fandango and Rotten Tomatoes. The move is intended to cut down on trolls who post negative scores without seeing a movie, or as was the case with Captain Marvel, posting scores and reviews before the movie even opened in theaters.
Why are gold prices and other safe-haven assets not spiking right now?
The ongoing trade dispute between the U.S. and China has sent markets on a series of roller coasters. But does Wall Street see any light at the end of the cloudy trade tunnel? Let's ask Journal of Markets reporter Akane Ohtani, who's here with us in our studio. So Akane, Wall Street is a forward-looking indicator and typically it trades on where it sees the wind blowing several months down the line. Do traders see this trade mess being resolved?
It depends a little bit on who you ask. And certainly on Thursday, we did see stocks take a little bit of a tumble because we saw some negative developments related to the trade negotiations going on and also some weak data out of the European Union. But that being said, a lot of indicators have suggested that investors and analysts are pretty optimistic that eventually, maybe not soon, but eventually there's going to be some kind of trade deal.
Now, there are specific measures of confidence in the market that have also signaled that Wall Street isn't caught up in the fear factor to really a strong degree. What types of factors do you look at?
So one of them is the Bank of America monthly survey of fund managers around the world.
How have corporate earnings and S&P forecasts held up amid trade concerns?
And that has shown that fund managers' expectations for future profits are actually at a nine-month high. And then gold prices, which we tend to track because they tend to rise when investors are a bit nervous about market swings and fall in the reverse scenario. So gold prices have actually barely moved for the entire month. So both those things kind of suggest to us that there's not a tremendous amount of fear being baked in at the moment.
And people you spoke with for your story said that market downturns in the current climate can be seen as buying opportunities and not really as the start of an extended downward trend.
What is the Federal Reserve's stance and how does it support market optimism?
That's right. And I think part of that has to do with just the overall trend when you look at the last 10 years, basically.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:05–0:09
2
What is the current impact of the U.S.-China trade dispute on markets?
0:09–1:09
3
Which market signals suggest Wall Street expects a trade deal?
1:09–1:28
4
How do fund-manager surveys reflect investor confidence about future profits?
1:28–2:11
5
Why are gold prices and other safe-haven assets not spiking right now?
2:11–3:19
6
How have corporate earnings and S&P forecasts held up amid trade concerns?
3:19–3:55
7
What is the Federal Reserve's stance and how does it support market optimism?
3:55–4:33
8
How is the bond market and yield-curve behavior influencing recession fears?
4:33–7:43
Speakers
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