➤ IMF cuts global growth forecast to lowest in decade.
➤ US, China to hold talks through next week.
➤ US bank earnings season kicks off.
➤ Treasurys, dollar rise.
➤ Barnier reportedly says Brexit deal possible this week.
U.S. equities rose as the U.S. bank earnings season kicked off and markets closely followed trade developments at a time when IMF cut its global growth forecast to the lowest level in a decade.
The S&P 500 rose 0.4% around 9:30 a.m. ET.
China may not be able to purchase $50 billion of U.S. agricultural goods per year unless retaliatory levies on American products are dropped, a move it is willing to make only if U.S. President Donald Trump reverses U.S. tariffs announced since the trade dispute began, Bloomberg News reported.
In a bid to finalize "phase one" of the U.S.-China trade deal, representatives from the two sides will conduct talks through next week, U.S. Treasury Secretary Steven Mnuchin told CNBC on Oct. 14. Yesterday, reports emerged that China was eyeing further discussions before a pact could be signed at the sidelines of the Asia-Pacific Economic Cooperation summit in Chile in November.
As part of the deal, the U.S. did not raise tariffs that were scheduled to take effect today. Mnuchin said the mid-December round of tariffs would kick in if an agreement is not reached.
The progress should improve market sentiment but uncertainty about the outcome of these talks will keep investors from celebrating too soon, according to Ipek Ozkardeskaya, senior analyst at the London Capital Group.
JPMorgan Chase & Co.'s third-quarter EPS topped estimates, as credit loss provisions increased. Wells Fargo & Co.'s and Goldman Sachs Group Inc.'s net income declined, while that of Citigroup Inc. jumped.
Global growth is projected at 3% for 2019, IMF said, 0.2 percentage point lower than the July forecast. The body also trimmed the U.S. economic outlook.
In Europe, the FTSE 100 lost 0.3% while France's CAC 40 advanced 0.7%. Germany's DAX rose 0.6%, though Wirecard AG shares sank more than 14% after a report alleged accounting irregularities at the company.
In Asia, Japan's Nikkei 225 surged 1.9%, Hong Kong's Hang Seng slipped 0.1% and the Shanghai SE Composite dropped 0.6%. Data showed that Chinese inflation rose to a six-year high in September.
Ten-year U.S. Treasurys advanced, with their yield dropping 2 basis points to 1.714%. Ten-year German Bund yields were little changed.
In currencies, the dollar index rose 0.1%, as St. Louis Fed's James Bullard said U.S. monetary policy may be "too restrictive" in the current environment, noting downside risks to U.S. economic growth, including trade uncertainty, which the Fed policymaker does not expect will dissipate in the years ahead.
Sterling traded 0.2% higher against the dollar amid optimism from EU's Michel Barnier, who reportedly said a deal is within reach this week. He said a deal needs to be agreed on today, for it to be considered at an EU summit later this week.
"Whether a deal will be reached before the EU summit is uncertain but it is clear that both sides are moving closer to a potential deal and this will support the pound going forward," wrote Lee Hardman and Fritz Louw, currency analysts at MUFG Bank.
BBC News reported that the bloc may hold another summit toward the end of the month.
Barnier said that fresh Brexit proposals from the U.K. were not satisfactory.
Separately, the U.K. unemployment rate unexpectedly rose and wage growth missed estimates in the quarter to August.
The euro slipped 0.3% as German economic outlook worsened in October, though the deterioration was less than expected.
The Turkish lira appreciated 0.5% against the dollar as Trump announced an increase in tariffs on steel imports from Turkey to 50% from 25% and the suspension of trade talks, in response to Turkey's military offensive in northeast Syria.
The Japanese yen was little changed.
Among commodities, Brent crude slipped 0.3% to $59.20 per barrel on the ICE Futures Exchange. Gold declined 0.4%.
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The day ahead:
12:45 p.m. ET – U.S. Fed's Esther George speaks
3:30 p.m. ET – U.S. Fed's Mary Daly speaks