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Stocks Hit Record Even as Trade Concerns Linger: Markets Wrap

Vildana Hajric and Claire Ballentine
Stocks Hit Record Even as Trade Concerns Linger: Markets Wrap

(Bloomberg) -- U.S. stocks sputtered late in the session Thursday but still managed to close at a record high as traders were whipsawed by conflicting headlines on the progress of trade talks with China.

Early reports that the U.S. and China were prepared to exchange tariff rollbacks pushed the the S&P 500 Index higher throughout the day, but the rally lost some steam after Reuters said the plan was meeting resistance in the White House. White House economic adviser Larry Kudlow later told Bloomberg, “If there’s a phase one trade deal, there are going to be tariff agreements and concessions.”

Before the Reuters report, haven assets from gold to sovereign bonds had been sinking -- along with defensive stocks like utilities and real estate -- as a risk-on mood gripped markets. Copper and crude jumped at least 2% before paring gains.

Sovereign bonds plunged around the world on the earlier positive trade news, with the 30-year Treasury yield hitting its highest since August. Ten-year French and Belgian bond yields climbed back above 0% for the first time in months, while the German equivalent surged 10 basis points. Yields remain elevated, even after the latest trade wrinkle. Gold fell nearly $30 an ounce at one point, only recover some of that loss, but still hit a three-month low.

Risk appetite had been picking up as news of progress on trade helped counter earlier reports that a preliminary accord may not happen this month as the two sides continued to wrangle over a location to sign it. But the latest headlines have left traders to wait for the next bit of news.

“Until it gets signed, I think markets are going to stay cautious, which means you’re not going to price in the best-case scenario,” Chris Gaffney, president of world markets at TIAA, said by phone.

West Texas crude futures traded near $57 a barrel in New York. The pound weakened after two Bank of England policy makers unexpectedly voted for an interest-rate cut.

Here are some key events coming up this week:

Earnings are due Thursday after the close from Walt Disney Co.The USDA World Agricultural Supply and Demand Estimates Report for November comes out Friday.

These are the main moves in markets:

--With assistance from Adam Haigh, Andreea Papuc, Elena Popina, Cecile Vannucci and Todd White.

To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Andrew Dunn

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