What has turned the market sentiment on 180 degrees in a few hours?

Market positivism seems to return as economic and geopolitical tensions have sharply declined over the past few hours.

Facts to date

1. US Treasury Secretary Steven Mnuchin said a deal with China is fully achievable as long as the Chinese government wants it. In view of the market behavior and the benefit that China can achieve, we expect Beijing to negotiate trade agreements with the United States.

2. Top Trump's advisor, Peter Navarro, expressed great hopes that the NAFTA agreement could be renegotiated without the US incurring much damage to its neighbors while at the same time achieving fair trade.

3. Kim Jong Un made a surprising visit to Beijing. And so far, it is not clear what the purpose of the trip to China is, but global markets reflect the news positively. North Korean leader hopes the international community that its plans to denuclearise the region will become a reality.

What to expect?
Weighing the White House's good tone and the decline in geopolitical tensions on the Korean Peninsula, we expect stock markets to grow at current levels. Positivism will also be preserved during the Asian session, where we do not expect major economic news that could break down the indices.

The black sheep in the markets continues to be Facebook, but the technology sector has grown by nearly 3%. Judging by the behavior of investors, the technology company will remain an isolated case and will hardly bring the domino effect to social network shares.

Source: Bloomberg Pro Terminal

Read more:

• USA ADP Nonfarm Employment Change: 202K vs 160K
• Iran response was ‘too fast and too furious’ on the U.S. airstrike
• USA – ISM Non-manufacturing PMI: 55.0 vs 54.5
• Top 5 things to watch on Tuesday
• Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making