US and Mexico Agree on a Trade Deal

Article Writter by: Lauriann Azzopardi – Junior Investment Advisor

US stocks gained on Monday, with the S&P 500 and Nasdaq closing at records for a second straight session, as the market rallied on enthusiasm over a new trade deal between the US and Mexico. It is also the first time the Nasdaq traded above 8,000, taking the index 164 trading days to rise 1,000 points. The Dow Jones Industrial Average jumped 1 percent to 26,049.64 after the blue-chip index successfully reclaimed the psychologically-important 26,000 mark for the first time since February. The S&P 500 index gained 0.8% percent to 2,896.74 and the Nasdaq Composite Index rose 0.9 percent to 8,017.90.

The pan-European STOXX 600 index was up 0.3 percent hitting a two-week high, while Germany’s exporter-heavy DAX gained 0.3 percent. Britain’s FTSE 100 rose 0.6 percent following Monday’s holiday, helped by a subdued sterling.

Toyota set to invest $500 million in Uber

Toyota is investing $500 million in ride-hailing giant Uber, in an attempt to accelerate autonomous ride-sharing. The investment values Uber – one of the world’s most valuable privately-held companies – at $72 billion, a significant jump from its recently-stated valuation of $62 billion.

Under the deal, the companies will incorporate self-driving technology into vehicles based on Toyota’s Sienna minivans. The program is set to pilot in 2021. Toyota has dubbed the platform Autono-MaaS, which stands for autonomous mobility as a services.

US and Mexico reach NAFTA deal

The US and Mexico agreed to overhaul the North American Free Trade Agreement, putting pressure on Canada to agree to new terms on auto trade and dispute settlement rules to remain part of the three-nation pact. The new deal would be called the United States-Mexico Trade Agreement, getting rid of the NAFTA name, as the latter has hurt the US very badly (as stated by President Trump). The deal is said to help farmers and manufacturers, and has been improved to help accommodate both countries.

As a result, auto stocks soared; the S&P 500 and Nasdaq rallied to record highs, based on expectations that Canada would sign onto the deal and ease the economic uncertainty caused by US President’s threats to ditch the 1994 accord. Trump threatened he still could impose tariffs on Canadian-made cars if Canada did not join its neighbors, and also extended warnings on Canada’s dairy protections.

President Trump offering farmers bailout to weather trade war

As US farm products are getting slammed by retaliatory tariffs, Trump’s administration plans to start its emergency plan for agriculture right after Labor Day in a three-pronged approach that will initially include $6 billion in aid. The US Department of Agriculture announced that it is authorised to provide up to $12 billion in aid: an initial aid of $4.7 billion to agricultural producers of seven commodities and federal government purchases of up to $1.2 billion in commodities unfairly targeted by unjustified retaliation and a third part made up of $200 million in spending to help develop foreign markets for agricultural products.