Dow marks 8-day win streak as US-China trade tensions ease

Posted at 4:13 PM, Sep 13, 2019

Nothing is spooking investors on this particular Friday the 13th. The Dow climbed to its eighth day of gains in a row on the news that China will exempt US soybeans and pork from its next round of tariffs.

The Dow finished 0.1%, or 34 points, higher, logging its longest win streak since May 2018. The index closed just 0.8% below its record closing high from mid-July, according to Refinitiv.

The S&P 500 finished 0.1% lower, and the Nasdaq Composite closed 0.2% lower.

It's been a stellar week for stocks, thanks to the US and China extending olive branches to one another in the ongoing trade war . All three major indexes recorded their third week of gains in a row.

Earlier this week, China agreed to exempt shrimp, cancer drugs, pesticides and more than a dozen other products from tariffs.

US President Donald Trump responded with a conciliatory move of his own, agreeing to delay a planned tariff increase from October 1 until October 15 in what Trump called " a gesture of good will" in a tweet.

The Dow climbed 1.6% this week and had its third consecutive weekly gain. The S&P rose nearly 1% and the Nasdaq climbed 0.9% for the week.

In economic news, the latest retail sales figures from the US government showed that consumer spending remains relatively healthy. Total retail sales were up 4.1% in the past 12 months.

Despite these solid numbers, investors are still betting the Federal Reserve will lower interest rates for the second straight time at its meeting next Wednesday. The rate cut in July was the Fed's first since December 2008.

The Fed is also expected to signal that several more rate cuts are possible later this year and in 2020, partly due to the effect of the trade war but also because rates in other parts of the world remain much lower than they are in the US. Rates are even negative in Europe and Japan.

But even though the Fed is probably preparing to cut short-term rates, long-term bond yields rose Friday thanks to the breakthroughs on the trade front and diminishing fears of a recession following the retail sales figures and a better-than expected reading on consumer sentiment from the University of Michigan.

The US 10-Year Treasury yield rose to 1.90% — its highest level since early August. The bump in long-term rates helped give bank stocks a boost. Banks are able to generate higher profits from their lending units when interest rates rise. Shares of JPMorgan Chase, Citigroup and Bank of America all rose.

Also on the corporate front, WeWork owner We Company said it plans to list its initial public offering on the Nasdaq and also announced several corporate governance changes to address concerns that CEO and co-founder Adam Neumann wields too much control over the money-losing coworking space owner.