U.S. Stocks Rise on Global Trade Optimism, Strong Consumer Confidence Data

The Conference Board’s index climbed to 133.4 in August, despite expectations from a survey of Reuter’s economists that it would fall to 126.7. The measure rose slightly last month to 127.4, up from 127.1 in June as consumers reported better feelings toward the economy in the near term but less optimism about long-term growth. · FX Empire

James Hyerczyk

Updated Tue, Aug 28, 2018, 8:38 PM

Asia stock markets are trending higher early Wednesday, mostly following Wall Street’s lead. The lack of fresh economic news has investors continuing to dwell on the trade agreement between the United States and Mexico announced on Monday. Investors are also optimistic that Canada will soon reach a similar deal after its Foreign Minister Chrystia Freeland traveled to Washington on Tuesday to resume negotiations about the future of NAFTA.

At 0156 GMT, Japan’s NIKKEI 225 Index is trading 22878.95, up 65.48 or +0.29%. The Hong Kong Hang Seng Index is trading 28351.23, down 0.39 or -0.00%. Australia’s S&P/ASX 200 is at 6321.10, up 16.40 or +0.26%. China’s Shanghai Index is at 2773.27, down 4.71 or -0.17% and South Korea’s KOSPI Index is at 2303.84, up 0.72 or +0.03%.

U.S. Equity Markets

The major U.S. stock indexes rose on Tuesday, supported by optimism over global trade after Monday’s announcement of a trade deal between the U.S. and Mexico.

The benchmark S&P 500 Index briefly broke above 2900 for the first time ever. The tech-based NASDAQ Composite also reached a record high. The blue chip Dow Jones Industrial Average settled higher, while moving closer to its all-time high.

Trade Deal

The new trade deal will be called “The United States-Mexico Trade Agreement”, according to President Trump. It will last 16 years, with it being placed under review every six years.

The U.S. is now preparing to negotiate a new deal with Canada. Treasury Secretary Steven Mnuchin told CNBC’s “Squawk Box” on Tuesday he is hopeful a deal with Canada will get done, but added he is prepared to “move forward with Mexico.” Mnuchin also said: “This is a great deal for American workers. If you remember one thing, this deal is about more trade for U.S. companies and goods and services, and that’s what we’re focused on.”

U.S. Economic News

Tuesday was dominated by a slew of minor reports with just one more important piece of information.

The Goods Trade Balance came in worse than expected, down 72.2 Billion. Traders were looking for a decline of 68.6 Billion. The previous report showed a 67.9 Billion deficit.

Preliminary Wholesale Inventories rose 0.7%, worse than the 0.1% estimate. The previous month’s figure was revised higher to 0.1%.

The S&P/CS Composite-20 Home Price Index (HPI) fell to 6.3% from 6.5%. The estimate was 6.4%.

The most important report on Tuesday was Consumer Confidence. It rose in August to its highest level since October 2000, building on July’s solid result.