A Trade Truce? Stocks Up?

After the meeting this weekend between US and Chinese Presidents, there has been an agreed upon 90-day tariff truce to many people's surprise after China agreed to buy a "substantial amount of American goods."

Chinese officials said that the country would buy more US products in an effort to narrow the wide bilateral trade gap.

At the same time, Trump agreed to postpone a scheduled increase in tariffs next month on US$200 billion in Chinese imports while talks to address American concerns about China’s trade practices took place.

If there is no deal at the end of the 90-day grace period, the US will increase tariffs on the US$200 billion of goods from 10 percent to 25 percent. The negotiations, and therefore the 90 days, start immediately.

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Scott Kennedy of the Center for Strategic and International Studies believes that December 18th will be an important date to determine where these events are going as it will be the 40th anniversary of China's economic reforms. Kennedy goes on to say: "If that day or week goes by with no major new announcements, then we know that for sure there's not a possibility that the Chinese want to use this as an opportunity to change the direction of their economy and industrial policies,"

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With this halt, stocks have jumped, not to many people's surprise.

Global stock markets rallied on Monday after the US and China agreed a 90-day truce in their trade war at a weekend meeting of the G20 nations in Argentina.

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The Dow Jones Industrial Average added more than 300 points, The FTSE 100 index in London rose more than 2%, Germany’s Dax jumped 2.6%, France’s CAC gained 2%, Spain’s Ibex rose 1.8% and Italy’s FTSE MIB gained 1.9%, Shanghai Composite Index rose 2.57%, Hong Kong was up 2.55% and Tokyo closed 1% better off. Australia’s benchmark ASX 200 index finished the day 1.8% higher. Even Soybeans have jumped up again for now. With little shock to myself, a temporary recovering seems to be on the way, but how long will it last? Some experts believe that a total crash won't happen until 2020, and they may be right, but we won't be making any actual predictions here. What do you think about the situation? Please leave your comments in the replies section below.

Have a very nice day!