Stocks closed higher Monday, after the U.S. and China agreed to a 90-day ceasefire and trade tariffs. The Dow ended up 288 points, Nasdaq up 111 and S&P 500 was up 30.
The stock market has been battered amid concerns about higher rates and a trade war, but now some believe President Trump has saved Wall Street just in time for the holidays.
Texas economist Dr. Ray Perryman says that's true at least in the short term.
“When he announces he's putting off additional trade tariffs with the China, the market goes up,” he says. “If he announces something else that's less favorable, the market goes down.”
“The news does matter, particularly on a given day. When you see an announcement that's favorable or unfavorable about the economy, that can move the markets pretty significantly, but what they normally don't do is trigger long-term trends.”
Some are already calling it a "bear economy," something Perryman is not convinced of just yet.
“The spread between short-term and long-term interested rates has now inverted, that is short-term rates are higher than long-term rates,”says Perryman.
“That has historically been some indication of a future recession, that sort of thing,” he says. “It's not a perfect indicator, but it's one that markets react to.”