Investors in international markets are making quick moves towards industrial stocks in expectation of a boom as there are strong indications that the US-China stalemate would soon end as Donald Trump is likely to announced date of a summit between leaders of both nations as per Wall Street Journal’s report. Several senior level discussions between both large economies indicate that progress has been made in trade talks and a formal trade agreement is likely to be signed soon. This anticipation has led to boost in share prices of engineering firms Caterpillar and Boeing which witnessed 3% growth and together added around 166 points to Dow Jones Industrial Average.
Nasdaq however remained impassive and in fact shed around 0.1 points as some are still skeptical of how the negotiations will end as they know that US will want tariffs to continue for some more time but markets are reacting positively to likelihood of a trade deal. Experts were watchful of Boeing stock and expected it to crash of close marginally lower due to the ongoing investigations about its 747 Max planes that crashed within six months of each other and technological changes could lead to slow-down in production of its highest selling product but that does not seem to be the case.
This could be because China made an announcement that it will purchase several Boeing planes as a sign of good faith in ongoing trade negotiations. The firm’s CEO Dennis Muilenburg stated that their engineering team is making a disciplined approach to correct the software that was responsible for the two recent air-crashes. That declaration along with Boeing’s reputation of being very strict with quality and safety standards has urged investors to hold on to the stock. Experts believe that Caterpillar’s products would be in high demand in China as they need earthmovers for construction purposes and most orders are placed through state owned enterprises.