Stock market news: December 13, 2019 – Yahoo Finance

U.S. stocks cut earlier gains and opened lower Friday after President Donald Trump refuted a report that suggested a partial trade deal with China would necessarily include a roll-back of existing tariffs.

Earlier, Dow futures had advanced by more than 100 points as trade optimism and a decisive win for British Prime Minister Boris Johnson after the U.K. general elections triggered a worldwide risk rally.

Here were the main moves in markets, as of 9:32 a.m. ET:

• S&P 500 (^GSPC): -0.11%, or 3.5 points

• Dow (^DJI): -0.06%, or 16.13 points

• Nasdaq (^IXIC): -0.11%, or 9.86 points

• 10-year Treasury yield (^TNX): -3.1 bps to 1.868%

• Gold (GC=F): +0.22% to $1,475.60 per ounce

In a Twitter post Friday, Trump said, “The Wall Street Journal story on the China Deal is completely wrong, especially their statement on Tariffs. Fake News. They should find a better leaker!”

While the post did not specify the exact WSJ article, it appeared to point to a report Thursday that detailed that Trump had agreed to a limited trade agreement with Beijing that would both roll back existing tariffs by roughly half and avert new levies set to take effect Sunday.

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As of Friday morning, traders were still awaiting final confirmation from either the U.S. or China that terms of a phase one trade agreement had been set in writing and signed. President Donald Trump had reportedly signed off on such a trade deal after meeting with trade advisers, according to reports from both the WSJ and Bloomberg Thursday afternoon citing people familiar with the matter.

The deal would reportedly cancel new tariffs on an additional about $156 billion worth of Chinese imports set to go into effect on Sunday. The prospects of these had been a major overhang for companies from apparel retailers to electronics-makers for months.

But the shifting trade rhetoric Friday and swift market reaction substantiated many investors’ beliefs that prospects for U.S.-China trade deal remains on shaky ground.

While any form of a U.S.-China trade deal would better position the world economy for continued growth, it would not likely be a convincing enough move to rebuild companies’ trust in historical global trade rules and supply chain dependability, Paul Donovan of UBS wrote in a blog post Friday.

“For thirty years, large companies invested in global supply chains. Global supply chains worked because global trade rules were known and trusted. The U.S. attracted foreign investment as a link in these supply chains,” he explained.

“Now the trust has gone. Investment in developed economies has slowed dramatically since early 2018,” Donovan added. “Would a Phase 1 trade deal rebuild trust in global trade structures? It seems unlikely.  The US has reversed trade agreements with Argentina and Brazil. A company investing in a global supply chain may worry that a Phase 1 trade deal will not last once Chinese food prices decline, or the US elections are held. Without that trust, investment will be limited.”

U.K. elections

Separately, the results of the British general elections overnight showed a historic victory for Prime Minister Boris Johnson’s Conservative party, which won 364 of 650 total seats as of Friday morning with one constituency left to declare results. Conservatives required just 326 seats in parliament to form a government.

This represented the best election result for the Conservative party since it won 376 seats in the House of Commons under Margaret Thatcher in 1987.

The major victory suggests Johnson will be able to pass a Brexit deal more easily, after both he and predecessor Theresa May failed to rally enough support for their respective withdrawal strategies numerous times over the past couple years. Johnson has vowed to deliver Brexit before January 31.

The British pound initially surged against the U.S. dollar (GBPUSD=X) and euro (GBPEUR=X) after the election results before paring some gains Friday morning ET. London’s FTSE 250 (^FTMC) rocketed to an all-time high.

November retail sales miss expectations

Retail sales rose just 0.2% in November after an upwardly revised 0.4% increase in October as spending on clothing and health and personal care stores declined during the month, the Commerce Department said in its advanced monthly report Friday.

Consensus economists had expected an increase of 0.5% in retail sales for November.

The disappointing result was led by a 1.1% monthly decline in sales at health and personal care stores, along with a 0.6% decline in sales at clothing and accessories retailers. Non-store retailers, or e-commerce stores, led with a 0.8% increase in November sales.

Excluding more volatile auto and gas sales, retail sales were flat in November, missing expectations for a 0.4% rise. The so-called core measure of retail sales excluding autos, gas, building materials and food services ticked up by just 0.1% in November, versus a 0.3% increase expected.

The lower than expected headline result suggests “real consumption growth was a little weaker in the fourth quarter than the 2.0% annualized we had pencilled in, but solid employment growth and loose financial conditions suggest a further slowdown beyond that is unlikely,” Andrew Hunter, senior U.S. economist for Capital Economics, wrote in a note Friday.

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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