Stocks have been volatile enough this month, but then again, so has President Donald Trump’s rhetoric on trade with China. Last week, President Trump was lobbing vitriol at the Chinese via Twitter (NASDAQ:TWTR) and opining that his only regret was not hitting the world’s second-largest economy with higher tariffs.
Today, Trump, from the G7 summit in France, said China is anxious to make a deal. While the Chinese are urging dialogue between the two sides, media outlets there implied that policymakers’ desire to come together with the U.S. on trade isn’t as Trump is leading the world to believe.
“They want to make a deal very badly,” said Trump in France. “The tariffs have hit them very hard.”
Over the weekend, Trump announced a trade deal with Japan, the finishing touches on which still need to be applied, but it looks like that country will up its purchases of U.S. agriculture goods while Trump is pledging to relax some tariffs on Japanese exports.
Overall, the improved trade sentiment was enough to send the Nasdaq Composite higher by 1.32% while the S&P 500 soared by 1.11%. The Dow Jones Industrial Average started the week in style, adding 1.05%. In late trading, just four Dow stocks were lower, but it’s worth nothing two if not three of those names are tariff-sensitive fare.
Walt Disney (NYSE:DIS) was the best-performing member of the Dow today, climbing 2.94%. Some of this may be enthusiasm for the company saying that it’s opening 25 stores in Target (NYSE:TGT) locations around the country in early October, just in time for the holiday shopping season.
“Disney stores will launch inside Target in major cities such as Philadelphia, Denver and Chicago. The company has stand-alone stores, but has closed its locations in West Virginia and Florida this year,” according to Reuters.
I’ll go out on a limb here and say that perhaps some of the rally in Disney shares today is attributable to the start of college football season and the looming kickoff of the NFL, two butters for the bread of Disney unit ESPN.
An Apple Today
I frequently say here that investors shouldn’t get caught up in one day of market action, so I won’t go out on a limb and say that growth stocks are back, but it was encouraging to see Apple (NASDAQ:AAPL) finish higher by 1.90% today. This is most certainly a trade war story because Apple counts on China for 20% of its revenue. Fortunately, President Trump cooperated for one day at least, prompting some bullish musings from Apple analysts.
“We see certain silver lining relative to timing that might allow Apple to navigate the challenging dynamic better than investors currently expect,” J.P. Morgan analyst Samik Chatterjee wrote in a research note Monday, according to Barron’s.
On a happier note, it was nice to Travelers (NYSE:TRV), probably the most overlooked Dow financial stock, rise 1.80% today even though this company has essentially no China exposure.
Johnson & Johnson (NYSE:JNJ) stock has been anything but healthy this month or this year, but managed to gain 1.02% today. An Oklahoma judge is expected to rule later on JNJ’s fate in the controversial opioid case. No, the company isn’t going bankrupt over this, but it’s likely looking at some hefty legal bills.
Dow Jones Bottom Line
Hopefully, the White House looks at Monday’s market action and sees it as a sign that when civility reigns in trade talks with China, investors benefit. Beijing should realize the same because it’s not as if markets there have been immune to the trade volatility. Far from it — at a time when the major market catalysts are President Trump’s Twitter account and the Federal Reserve, investors are left hoping that the former relaxes, even a little bit.
Todd Shriber does not own any of the aforementioned securities.