Similarly, Fan Cheuk Wan, Asia chief market strategist at HSBC Private Bank, said: “for the market, the more meaningful driver still remains the economic cycle and earnings momentum. Based on previous experience we have come across during SARS, the impact of the virus is likely to be short-lived.”
U.S. Treasury Secretary Steven Mnuchin told The Wall Street Journal that a phase two trade deal between China and the U.S. might not eliminate all existing tariffs. “We may do 2A and some of the tariffs come off. We can do this sequentially along the way,” he said.
At the World Economic Forum in Davos, Switzerland, President Donald Trump told the Journal he is “absolutely serious” about slapping tariffs on European cars if a trade deal with the EU cannot be reached.
White House economic adviser Larry Kudlow said U.S. economic growth will exceed 3% in 2020. “This is a long cycle and what you’ve got here in the Trump years is essentially a mini upcycle,” Kudlow said. “You’ve gone from 1.5% to 2% growth. We had it going at almost 4% then the Fed tightened.”
But hedge fund billionaire Paul Tudor Jones is skeptical about the recent stock rally.
“We are just again in this craziest monetary and fiscal mix in history. It’s so explosive. It defies imagination,” Jones, founder of Tudor Investments, said at Davos.
Shares of Boeing (BA) dropped 3.35% on speculation that regulators will not approve its 737 Max aircraft until June or July.
Overnight in Asia, markets finished lower. China’s Shanghai Composite dropped 1.41%, while Hong Kong’s Hang Seng plunged 2.81%, and Japan’s Nikkei-225 fell 0.91%.
In Europe markets finished mixed, as Britain’s FTSE-100 dropped 0.53%, France’s CAC-40 fell 0.54% and Germany’s DAX gained 0.05%.
Crude oil futures dropped 0.5% at $58.25 per barrel and Brent crude fell 0.09% at $64.53. Gold futures edged down 0.1%.
The euro slipped 0.08% at $1.1086 while the pound sterling gained 0.25% at $1.3041.
The yield on the 10-year Treasury plunged 3.65% to 1.769% while yield on the 30-year Treasury tumbled 2.83% to 2.231%.
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