S&P 500 reached its highest point on Monday, since early November, while getting back from all the December’s distress.

The predictors said that the period of sustained increases reflects the optimism that the U.S. and China will come to a good agreement on trade after Trump postponed the dates for boosting tariffs on China imports.

However, the postponing move actually means that Trump administration is trying to postpone higher taxes on America residents by not doubling traffic on Chinese goods when U.S. growth is not improving. But the Bank of America strategists say that market will soon realize that continued delays without any progress will just extend the uncertainty.

Trump said the U.S. and China are getting close, and a meeting with Xi Jinping seems a bit off. He also added that a meeting with China might occur soon or may not happen at all.

Now, this explains why S&P 500 has spent most of the day in gains. Further, it closed up just 0.12 percent after rising as much as 0.75 percent.

Moreover, as there are no fresh developments on trade’s development after Monday’s announcement, investors are left contemplating a mixed picture of global economy, such as decreasing the forecasts on growth.

Bond Traders Are Not Happy

The stock market continues to ignore the messages that are being sent by U.S. Treasuries for some unexplainable reasons. Despite the good feelings spreading the equities, the bond market is not able to shake off the blues as more than three-quarters of economists expect the United States to enter a recession by 2021.

For instance:

According to Bloomberg Barclays U.S. Treasury Index, yields on all treasuries ended at an average of 2.59 percent, last week.

Yield on 10-year Treasuries rose to 2.67 percent on Monday.

Yields on government debt from major global economies ended at 1.29 percent.

China’s Yuan Condition

The yuan has increased by some 2.83 percent this year, and this has been its strongest level since July 2018. It appreciated as the authorities signaled that they would gear up their efforts to keep the local economy from slowing down.

At a rate of 6.6891 to dollar, the currency is moving away from 7 per dollar rate. This rate is throwing the markets in disarray, but no one is really concerned about it now.

With the turnaround in China’s Yuan, the MSCI emerging market index of equities rose to its high level, since the start of August.

Impact of Trump Tweets

The one market area where Trump’s tweets seem to have the most impact is commodities. As Donald Trump tweeted that prices are too high and called on OPEC to take it easy, West Texas Intermediate futures came down as 3.81 percent and had their biggest slide since December.

Even, Trump is not wrong as oil had risen to $57.81 a barrel, which was the highest since November and from last year’s low of $42.36 in December.

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