Will this G20 summit makes markets rally?

The S&P500 headed for its best month since January after stocks halted four days of declines as trade optimism reigned ahead of USA – China talks at the G20 conference this weekend in Japan.

Banks led gains on the day and energy producers fell as oil hovered just under $60 a barrel.

The 10-year Treasury yield slipped below 2.02%, with Goldman Sachs Group Inc. cutting its year-end forecast for the rate to 1.75%, matching JPMorgan Chase & Co.’s call from May 31. The yield has plunged from 2.4% at the end of the first quarter. The two-year rate hit 1.74%.

The Saturday sit-down between President Donald Trump and Xi in Japan looms as a key event for the markets. Investors are keeping an eye on monetary policy and expectations central banks will cut rates to counter signs of a slowing global economy.

“Investors need to be sensitive to this rally, that it’s not driven by corporate fundamentals or better economic data,” Deepak Puri, Americas CIO at Deutsche Bank Wealth Management, said in an interview at Bloomberg’s New York headquarters. “It’s purely driven by two things: one is the Fed and ECB, the global concerted effort to go on an easing cycle. And second, with this near-term resolution on trade, which they might be up for disappointment because we don’t expect the G-20 summit to bring anything materially different than a handshake and a continuation of talks.”



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Source: Bloomberg L.P.


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