US open: Stocks go green as Washington grants Huawei a temporary reprieve
By Iain Gilbert
Date: Monday 19 Aug 2019
(Sharecast News) - Wall Street stocks opened higher on Monday after news broke over the weekend that the Commerce Department would grant Chinese telco giant Huawei a further 90-day reprieve from a prohibition on US companies to trade with it, although in remarks made at the weekend, the US President had appeared to call that possibility into question.
As of 1530 BST, the Dow Jones Industrial Average was up 0.88% at 26,114.30, while the S&P 500 was ahead 1.04% at 2,918.70 and the Nasdaq Composite started out the session 1.23% firmer at 7,992.79.
The Dow opened 228.29 points higher on Monday after turning in a solid performance on Friday when a strong set of results from Walmart and some positive economic data had helped to offset worries from a vow by China to counter the latest round of tariffs from the White House.
Sentiment was buoyed by remarks from Commerce Secretary Wilbur Ross himself to Fox Business that his department would extend Huawei's license for 90 days, allowing it to keep sourcing components from US companies so that it could continue to service its existing customers, including many rural US telecommunications firms .
But with the current agreement set to end on Monday, the President had said on Sunday that he might not want to do business with the firm, saying that it posed a national security threat.
"We'll see what happens. I'm making a decision tomorrow," he said.
Also on Sunday, Trump said he did not believe that there was any chance of a global recession in the immediate future despite the very volatile trading seen in global financial markets over the preceding week.
"I don't think we're having a recession," Trump told reporters.
"We're doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they're loaded up with money."
On the corporate front, Apple chief executive Tim Cook spoke with Trump over the weekend. The head of the Californian tech firm told the President that it would be difficult for Apple to compete as a result of the trade war, given that trade tariffs would likely cripple it, while Samsung would not have to face the same level of duties given that its manufacturing operations were located in South Korea.
Chipmakers like AMD, Micron Technologies and VanEck Vectors gained following the news.
Shares in the likes of Bank of America, Citigroup and JP Morgan Chase rose in early trade after 10-year Treasury yields jumped to around 1.61%.
No data points were scheduled for release.
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