* Trump chills out on China
Just as suddenly as Trump's familiar-sounding threat to impose 100% tariffs on China for curbing exports of rare earths sent Wall Street into freefall on Friday, de-escalation on Monday invited a rush of renewed stock buying that looked to put record territory back in play.
Treasury Secretary Scott Bessent told Fox Business Network that the president was back on track to meet Chinese President Xi Jinping in South Korea later this month as originally planned.
While Monday was a normal day for stock markets, bond traders were off for Columbus Day and Indigenous Peoples' Day. The federal holiday came as many government workers are already furloughed while the shutdown drags on, and some could be out of a job when Congress ends it and agrees on a spending bill.
There is no sign that Democrats and Republicans will find common ground this week, meaning indicators like producer prices, retail sales and weekly jobless claims will not be released and join the list of important, but probably stale, data like September payrolls that will someday be released in a flood.
But Tuesday promises to be busy nevertheless with JPMorgan Chase JPM, Goldman Sachs GS, Citigroup C and Wells Fargo WFC releasing earnings to kick off the third-quarter reporting season. Also Federal Reserve Chairman Jerome Powell speaks in Philadelphia on economic conditions and monetary policy, with data-starved traders even more keen to get a read on how the Fed will make a decision to ease again, or not, when it is missing weeks of information on the economy.
* Gold: The Fear Trade
Gold is perhaps the biggest beneficiary of the upwelling of recriminations between Trump and Xi. It rose above $4,100 an ounce for the first time on Monday, even after they turned the heat down, with traders betting that more Fed easing by year-end will make zero-yield bullion more appealing. With central banks buying and investors availing themselves of ETFs, there appear to be enough positives to keep the rally going. Silver also hit a record above $52 an ounce.
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