Stocks – Wall Street Sees Small Gains as Trade Euphoria Wanes

Investing.com – A day after the phase one U.S. China trade deal was finally struck, a hangover set in.

Stocks finished with very small gains Friday, led mostly by tech stocks. The rest of the market struggled.

The was basically flat, although the index did finish with a record close of 3,168.80. The rose 0.1%, or 3 points as gains for Apple (NASDAQ:), Microsoft (NASDAQ:), JPMorgan Chase (NYSE:) and others were offset by struggles for Boeing (NYSE:) shares.

The added 0.2%. The 0.3% gain, or 26 points. Both were record closes. The gains were basically due to Apple (NASDAQ:), Microsoft (NASDAQ:), Adobe Systems (NASDAQ:), Comcast (NASDAQ:) and Amazon.com (NASDAQ:).

But the close was off substantially from early in the day when the indexes all hit intraday peaks.

The hangover was the result of the market buying the rumor (the U.S.-China trade deal was coming), and then selling the news (the trade deal is here).

Except that it won’t be signed until January and texts weren’t available to show the details. The deal includes Chinese purchases of grains and other farm products and a commitment to crack down on patent piracy and other measures. In return, the U.S. agreed to reduce tariffs on $120 billion in products to 7.5% from 15%. That reduction will take effect 30 days after the agreement is signed. New tariffs that had been scheduled for Dec. 15 won’t go into effect.

While President Donald Trump crowed about the deal, other officials, including economic advisor Larry Kudlow, were surprisingly wary of it. The deal will offer some confidence for business, Kudlow told CNBC Friday afternoon, but “we will see how it works. We will see if the Chinese stay with their word.”

And U.S. stocks didn’t move higher after Britain’s Tory Party scored their big electoral victory Thursday. British stocks rallied on the news with the benchmark up 1.1%.

So, the market ended the week with small gains — about 0.5% for the , 0.7% for the S&P 500 and 0.9% for the Nasdaq.

The market’s malaise was mirrored by two commodities. moved up on the trade deal’s uncertainties. Oil jumped with crude settling above $60 a barrel for the first time since July, a signal that traders see OPEC’s moves to cut production pushing prices higher.

Interest rates shot up Thursday, as stocks rallied on the trade news. They fell on Friday. The Treasury yield fell to 1.826% from Thursday’s 1,899%.

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