Dow Jones opens more than one percent in plus

Wall Street

The Dow Jones starts trading more than one percent higher.

(Photo: AP)

Dusseldorf At the end of the week, US stock exchange trading is optimistic. The Dow Jones index of standard values ​​opens 1.2 percent higher at 26,390 points. The technology-heavy Nasdaq advances 0.9 percent to 10,100 points. The broad S&P 500 is 1.1 percent up at 3148 points.

US investors hope that the tide between the US and China will level off given the recent trade negotiations. China is planning to accelerate the purchase of American agricultural goods in order to comply with the phase one trade agreement with the United States following the talks in Hawaii this week.

In the so-called phase one part, the USA and China had committed themselves not to impose new tariffs. China also promised to buy additional US goods valued at approximately $ 200 billion over the next two years, including $ 40-50 billion worth of agricultural goods, according to the US government.

However, China only bought $ 4.65 billion worth of agricultural goods in the first four months of the year, according to data from the U.S. Department of Agriculture. That is only 13% of the target set in the trade agreement and almost 40% less than in the same period in 2017.

Earlier this month, Chinese government officials said insiders had responded to rising tensions over Hong Kong by ordering large state-owned agricultural companies to stop buying some American agricultural goods, Bloomberg reported.

However, Chinese importers have continued to increase their soy purchases in the United States, harvesting 2.2 million metric tons of the oilseed in the two weeks to June 11, according to data from the US Department of Agriculture.

China now plans to accelerate purchases of everything from soybeans to corn and ethanol after purchases have stalled due to coronavirus disruption, Bloomberg said, referring to people familiar with the matter.

On Thursday, US Secretary of State Michael Pompeo said that China’s top foreign policy official has committed to honor all of its nation’s commitments under the trade agreement.

After the recent setbacks in the fight against the spread of the coronavirus, US investors seem to have taken new courage. Yesterday, the Dow Jones closed 0.2 percent lower. Now investors are betting that the government and central bank can get the economy back on track.

But the pandemic is far from over, the fear of a second wave remains in the back of the mind. A quick relapse is more likely, analysts expect a range between 22,700 and 28,200 points with regard to the price development of the Dow Jones index.

“We expect share prices to continue to rise, driven by a very aggressive monetary easing, fiscal aids and the continued reopening of the global economy with some temporary setbacks,” said strategist Sebastien Galy from asset manager Nordea Asset Management. On Friday, investors hid the record increase in new corona infections in one day in six US states.

As options on indices and shares on the futures exchanges expire on Friday during the Witches’ Sabbath, there could still be greater fluctuations on the stock markets during the day. Investors then try to drive prices in a direction that is favorable for them.

Look at the individual values

Shares of Oil companies Exxon and Chevron the rising oil prices benefited. The papers won up to two percent. Occidental Petroleum and Devon Energy climbed more than three percent. The oil price rose about two percent the day after the meeting of the Opec countries and their allies.

According to insiders, the Opec member states Iraq and Kazakhstan promised to stick to the agreed cuts in funding. This suggests that funding could be cut even more in July.

With agency material

More: This is how the trading day on the Frankfurt Stock Exchange went.

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