Stocks hit on dimming trade deal hopes | Fed to the rescue, again?

TUE, OCT 08, 2019

EVENING BRIEF

EDITOR'S NOTE

Stock investors awoke Tuesday morning looking for any sign of progress on trade talks with China, and seeing none, drove the market lower.

The 13th round of trade negotiations between the U.S. and China is slated for Thursday and Friday. A report that the leader of the Chinese delegation would not arrive with specific instructions from President Xi Jinping sent markets sharply lower as they opened.

On a more positive front, China has not yet retaliated after the White House blacklisted 28 Chinese companies from doing business with American firms unless granted a special permit. The blacklisting came with a warning on human rights issues.

China's Ministry of Commerce responded only by urging the U.S. to stay out of the country's domestic affairs. Later, the Trump administration announced it was putting visa restrictions on Chinese officials over abuses of Muslims in Xinjiang.

All the back and forth is not soothing markets, which are back in a downtrend after an attempt to rebound in September:

Tomorrow, investors will have more than trade talks to ponder as the Federal Reserve releases the minutes from its September meeting. The central bank lowered rates then, and it's widely expected to do so again when it meets at the end of this month.

Fed Chairman Jerome Powell, speaking in Denver at a meeting of the National Association for Business Economics on Tuesday, reiterated his position that the Fed will act appropriately to keep the expansion going and that its future moves will depend on the latest data.

"Growth around much of the world has weakened," Powell said, "and uncertainties around trade, Brexit and other issues pose risks to the outlook."

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