President Donald Trump met with Chinese Vice Premier Liu He on Friday. Liu delivered a letter to Trump saying Chinese President Xi Jinping hopes the two countries can redouble efforts to strike a trade deal.
Trump’s meeting with Liu on Friday comes after a U.S. delegation met with Xi last week. Sources told CNBC that Trump and Xi are also discussing a summit at Mar-a-Lago late in March. The sources also said China is committed to buying $1.2 trillion in U.S. goods.
“This is constructive not just for the market but also for the global economy,” said Quincy Krosby, chief market strategist at Prudential Financial. A deal “would help the Chinese economy stabilize. That obviously helps the global economy.”
“It has a broader impact than the bilateral U.S.-China relations,” Krosby said.
Optimism has risen over the chances of both countries securing a deal to end their protracted trade war, but some experts say the most difficult part is yet to come.
“There’s obviously an incentive for both sides to reach a deal,” James Athey, senior investment manager at Aberdeen Standard Investments, told CNBC “Squawk Box Europe” on Friday. “The problem is that you’re now getting to the more difficult part of the negotiation, which is things like the IP (intellectual property) problem.”
The U.S. is simultaneously trying to figure out trade matters with Europe. The European Union is preparing to target heavy machines made by U.S. companies like Caterpillar if the U.S. slaps tariffs on cars made in the EU, according to a Bloomberg News report. Shares of Caterpillar dipped 0.1 percent on Friday.
The Trump administration is threatening to slap tariffs of up to 25 percent on European autos and auto parts.
“The markets may find that, as soon as they get out of the frying pan with respect to China, they may find themselves back in the fire with respect to Europe,” said Bruce McCain, chief investment strategist at Key Private Bank. “For that reason, this market that has risen very sharply and very quickly in a world that has not resolved all of its problems, could lead to some disappointment.”
“It’s not like we need to be discouraged and raise tons of cash, but I think that the optimism in the market is probably overdone at this point,” McCain said.
Intel shares rose more than 2 percent on Friday after Morgan Stanley upgraded the stock to overweight from equal weight, noting Intel could get a boost now that Bob Swan is the full-time CEO.
Shares of Kraft Heinz plummeted 27.46 percent after the consumer products company disclosed an SEC subpoena from an investigation into its accounting practices. The company also disclosed a $15.4 billion write down.
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