US Markets Up as Trade Talks Resume

US China Trade War NinjaTrader MES Micro E-mini S&P Futures

Major US equity indexes were up Tuesday morning on news that China and the U.S. plan to continue trade negotiations. President Donald Trump expressed optimistically that he expects the talks to be successful.

While Micro E-mini S&P 500 futures (MES) closed down 2.7% yesterday, or 78.75 points, they have climbed back only as much as 31.25 points.

Last week following an impasse in talks, the U.S. raised tariffs on $200 billion worth of Chinese imports. China retaliated by raising tariffs on $60 billion worth of American goods, effective next month. Additionally, China could also sell off some of its large US Treasury bond holdings which could spike interest rates and cause additional economic damage to the U.S.

“My understanding is that China and the United States have agreed to continue pursuing relevant discussions. As for how they are pursued, I think that hinges upon further consultations between the two sides,” reported Chinese Foreign Ministry spokesman Geng Shuang.

Additionally, yesterday Trump said he would be meeting with Chinese President Xi Jinping at an upcoming G20 summit late next month and expects the talks to be fruitful.

Above is a 10-minute chart of MES Micro E-mini futures since they started trading Monday of last week. A path connecting the lows has been drawn with the path drawing tool and a MACD indicator has been added in the lower panel to analyze trend strength.

To date the trend has been predominantly bearish but today’s buying pressure could change the market’s course, provided the stream of news remains positive.

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