STREAMING NOW: Watch Now

Stocks pop after new US-Canada-Mexico deal

The stock market appears to like the new trade agreement between the United States, Canada and Mexico....

Posted: Oct 2, 2018 10:06 AM
Updated: Oct 2, 2018 10:06 AM

The stock market appears to like the new trade agreement between the United States, Canada and Mexico.

Stocks popped after all three countries agreed to an 11th hour deal to replace NAFTA.

The Dow rose 193 points, a gain of 0.7%. The S&P 500 gained 0.4%, and the Nasdaq lost 0.1%.

The reworked trade deal, announced late Sunday night, was reached after Canada agreed to give US dairy farmers greater access to the Canadian market.

The United States also agreed to make concessions on some automobile tariffs for cars and trucks built in Canada and Mexico as part of the agreement, which replaces NAFTA and will be called the United States-Mexico-Canada Agreement (USMCA).

Shares in major automakers rose on the news. GM gained 1.6%, and Ford climbed 0.8%. Fiat Chrysler rose 2.7%.

Still, some market experts said investors may be overreacting to the USMCA deal. That's because the United States still faces another major trade battle.

"While the U.S. has reached a new trade agreement with Mexico and Canada, growing trade conflict between China and the U.S. threatens economic growth in both countries," said David Kelly, chief global strategist with JPMorgan Funds, in a report Monday.

Eric Winograd, senior economist with AB, also thinks that China-US tension will not be resolved this easily.

"The US relationship with China is much more complicated than its relationship with Canada. And of course the stakes are considerably higher when dealing with China—the Chinese have leverage over the US that Canada simply doesn't have," Winograd wrote, referring to China's ownership of US Treasury debt as well as the fact that it's a much bigger market for US exports.

"I certainly wouldn't rule out an agreement being reached with China, but I don't think that the US-Mexico-Canada Agreement provides a template that can be used in discussions with the Chinese," Winograd added.

Others think that a US-China deal is inevitable, which makes the market's reaction to the USMCA agreement, a logical one.

"Many investors are betting there's room for a market friendly compromise after the US midterm elections in early November when the Chinese will have an incentive to deal to avoid the 25% tariff rate that kicks in on $200 billion in Chinese exports on January 1, 2019," wrote Alec Young, managing director of global markets research for FTSE Russell, in a report.

Other market movers

It's not just the trade deal helping move the markets.

The surprise ouster of General Electric CEO John Flannery and a deal between Tesla and the SEC are also having a big effect.

Shares of GE jumped 7% following the news that Flannery, who had only been CEO since August 2017, is being replaced by Larry Culp, a former head of industrial conglomerate Danaher.

Culp, who joined GE's board in April, faces a difficult task in getting GE back on track. GE also announced Monday that it was taking a charge tied to its struggling GE Power unit. The stock had fallen 35% this year before Monday's surge.

GE's market value slipped below $100 billion last week for the first time in more than nine years. And the company was removed from the Dow Jones Industrial Average in June after a more than 100-year stay in the iconic market barometer.

Tesla also rallied Monday after the electric car maker reached a settlement with the Securities and Exchange Commission that will require Elon Musk to step down as chairman but allow him to stay on as CEO.

Shares of Tesla climbed 17%. The stock plunged 14% Friday on the news that the SEC had filed a lawsuit accusing Musk of making "false and misleading statements" earlier this summer when he tweeted that he had "funding secured" for a deal to take Tesla private.

As part of Tesla's deal with the SEC, Musk did not admit to any wrongdoing. The company is also paying a $20 million fine.

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Confirmed Cases: 34211

Reported Deaths: 2125
CountyConfirmedDeaths
Marion9761576
Lake3573186
Allen160069
Cass15877
St. Joseph126634
Elkhart126228
Hendricks116671
Hamilton115493
Johnson1097108
Madison58659
Porter53428
Bartholomew50834
Clark49741
LaPorte43023
Howard40428
Tippecanoe3933
Delaware38536
Jackson3821
Shelby37122
Hancock33127
Floyd31839
Boone31635
Morgan27824
Vanderburgh2662
Montgomery23817
White2338
Noble22821
Clinton2271
Decatur22431
Grant21022
Dubois1993
Harrison19422
Henry17211
Greene16924
Vigo1688
Dearborn16821
Monroe16712
Warrick16628
Lawrence15924
Miami1401
Putnam1367
Jennings1304
Kosciusko1271
Orange12622
Scott1193
Franklin1108
Ripley1086
Marshall1021
Carroll932
Daviess8516
Steuben832
Wayne785
Fayette777
Newton7710
Wabash772
LaGrange762
Jasper661
Washington521
Clay511
Jay500
Fulton491
Randolph473
Rush462
Pulaski460
Jefferson451
Whitley413
Starke393
DeKalb371
Sullivan351
Owen341
Brown331
Perry320
Wells310
Benton300
Knox280
Huntington272
Tipton251
Blackford252
Crawford240
Fountain212
Switzerland200
Spencer201
Parke170
Adams171
Posey160
Gibson152
Ohio130
Warren121
Martin110
Vermillion100
Union90
Pike60
Unassigned0167

Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Confirmed Cases: 118917

Reported Deaths: 5330
CountyConfirmedDeaths
Cook771193603
Lake8238288
DuPage7620368
Kane6259176
Will5510273
Winnebago220955
McHenry153972
St. Clair112180
Kankakee90045
Kendall77819
Rock Island65124
Champaign6277
Madison57259
Boone44117
DeKalb3994
Sangamon34829
Jackson28210
Randolph2694
Peoria2218
McLean21813
Ogle2033
Stephenson2012
Macon19419
Clinton18617
Union15510
LaSalle15013
Whiteside13912
Iroquois1314
Coles12615
Out of IL1181
Warren1150
Jefferson10116
Grundy982
Knox980
Monroe9511
McDonough8711
Lee811
Unassigned800
Cass730
Tazewell725
Henry690
Williamson661
Pulaski560
Marion500
Jasper457
Macoupin452
Adams441
Perry420
Montgomery391
Vermilion391
Morgan361
Christian354
Livingston342
Jo Daviess320
Douglas270
Fayette203
Ford201
Jersey201
Menard200
Woodford192
Mason180
Washington180
Hancock170
Mercer170
Carroll162
Shelby161
Bureau151
Schuyler130
Bond121
Franklin120
Clark110
Crawford110
Fulton110
Moultrie110
Piatt110
Brown100
Cumberland100
Logan100
Wayne91
Alexander80
Henderson80
Johnson80
Effingham71
Massac70
Saline70
Greene50
Marshall50
De Witt40
Lawrence40
Richland30
Stark30
Clay20
Edwards20
Gallatin20
Hamilton20
Wabash20
White20
Calhoun10
Edgar10
Hardin10
Pike10
Pope10
Putnam10
Terre Haute
Clear
58° wxIcon
Hi: 74° Lo: 51°
Feels Like: 58°
Robinson
Clear
62° wxIcon
Hi: 74° Lo: 50°
Feels Like: 62°
Indianapolis
Few Clouds
57° wxIcon
Hi: 71° Lo: 47°
Feels Like: 57°
Rockville
Clear
57° wxIcon
Hi: 73° Lo: 50°
Feels Like: 57°
Casey
Clear
58° wxIcon
Hi: 74° Lo: 52°
Feels Like: 58°
Brazil
Clear
58° wxIcon
Hi: 73° Lo: 50°
Feels Like: 58°
Marshall
Clear
58° wxIcon
Hi: 74° Lo: 50°
Feels Like: 58°
A great Sunday on tap!
WTHI Planner
WTHI Temps
WTHI Radar

WTHI Events