Captain's Quarters

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Trump Tweet Spurs Massive Rally in Chinese Equities

The Shanghai Composite Index is already up 18% for the year, having risen about 5% only in the past five trading days as hopes of a trade deal with the U.S. spurred optimism in the country’s financial markets. Traffic in Chinese equities surged 72% after officials on both sides of the Pacific signaled significant progress in the talks regarding the trade surplus China holds with its largest partner, the United States.

In a trademark tweet, President Trump said that the scheduled March 1 tariffs could be postponed as talks with the Chinese authorities are advancing towards a far-reaching deal that would end a trade war blamed for slowing global economic growth and disrupting markets. At the end of November, Trump and Chinese President Xi Jinping called a 90-day truce that delayed the tariff hike from 10% to 25% on $200 billion worth of Chinese imports.