By Chris Matthews, MarketWatch

China's exports, imports tumble as trade surplus widens

U.S. stocks were little changed Monday morning, after opening lower, as investors reevaluated the"phase-one" trade deal between the U.S. and China, announced in the final minutes of trade Friday, with growing concern that the agreement will not lead to significantly lower trade barriers or greater certainty over Sino-American trade relations.

How are the major benchmarks faring?

The Dow Jones Industrial Average were up 35 points, or 0.2% to 26,857, while the S&P 500 index was up 1 point at 2,971. The Nasdaq Composite index , was up 10 to 8,067.

On Friday, the Dow rose 319.92 points, or 1.2%, to 26,816.59, the S&P 500 advanced 32.14 points, or 1.1%, to 2,970.27, while Nasdaq gained 106.26 points, or 1.3%, to 8,057.04.

What's driving the market?

Wariness over the strength of an agreement hammered out between the U.S. and China last week was growing on Monday after reports that Beijing wants more talks before signing any such deal., though U.S. Treasury Secretary Steven Mnuchin remained confident a deal would be concluded.

While a rise in U.S. tariffs on Chinese imports due Tuesday will not now go into effect after President Trump announced at least a partial deal late Friday, no White House decision has been made yet on planned on a new 15% tariff set to go into effect on Dec. 15 on about $160 billion in annual Chinese imports. U.S. Treasury Secretary Steven Mnuchin told reporters on Monday (https://www.cnbc.com/2019/10/14/mnuchin-says-he-expects-tariffs-to-go-up-in-december-if-there-is-no-china-deal-in-place.html) (https://www.reddit.com/r/personalfinance/comments/dhkedi/how_could_i_safely_invest_400k_to_enable_me_to/) that if a deal isn't in place by December, those tariffs will go ahead, but he also said, "I expect we will have a deal."

After Mnuchin spoke, Hu Xijin, the influential editor-in-chief of China's state-controlled Global Times (http://www.globaltimes.cn/), tweeted that China's attitude about a deal remains "positive":

(https://twitter.com/HuXijin_GT/status/1183736136276951041)

Meanwhile, the China-owned English newspaper China Daily (http://global.chinadaily.com.cn/a/201910/14/WS5da3ce03a310cf3e3557041a.html) said in an article Monday while the forward steps in trade talks were "encouraging," a "partial deal, if inked doesn't mean the trade row has been settled once and for all."

As part of the deal, the U.S. postponed a planned tariff increase on $250 billion in Chinese imports from 25% to 30%, originally set to take effect Tuesday, in exchange for Chinese promises to buy $40 to $50 billion in American agricultural products annually though that would be double the $24 billion China bought in 2017. (https://www.reuters.com/article/us-usa-trade-china-agriculture/trumps-hailing-of-50-billion-in-chinese-farm-purchases-seen-as-meaningless-idUSKBN1WT0TG?il=0)

A bigger trade deal will come over time in three stages, (https://www.wsj.com/articles/china-emerges-with-wins-from-u-s-trade-truce-11570912439) according to Trump, with more divisive issues to be addressed later. These include Chinese practices that the U.S. alleges but Beijing denies, such as forced transfers of U.S. technology to its economic rival.

Earlier citing sources, Bloomberg reported (https://www.bloomberg.com/news/articles/2019-10-14/china-wants-more-talks-before-signing-trump-s-phase-one-deal-k1q8bxgz?utm_content=business&utm_source=twitter&utm_campaign=socialflow-organic&utm_medium=social&cmpid=socialflow-twitter-business) Monday that China wants further discussions as soon as the end of October, to smooth out details of the so-called "Phase 1" trade deal announced by President Donald Trump that will delay a tariff hike, boost Chinese agricultural purchases and address foreign currency levels. The agreement was not set out in writing, and only in principle.

Meanwhile, the threat of higher tariffs still hang over the global economy and financial markets, as a round of 15% tariffs on about $160 billion in consumer goods is still set to be imposed on Dec. 15th, underscoring the continued uncertainty that global business leaders face as they attempt to measure consumer demand and plan investment.

A bigger trade deal will come over time in three stages, (https://www.wsj.com/articles/china-emerges-with-wins-from-u-s-trade-truce-11570912439) according to Trump, with more divisive issues to be addressed later. These include Chinese practices that the U.S. alleges but Beijing denies, such as forced transfers of U.S. technology to its economic rival.

"On the one hand, this 'mini' deal is an encouraging sign, as it reduces the risk that the trade battle escalates into a full-scale cold war," wrote Marios Hadjikyriacos, investment analyst at XM, in a Monday note.

"However, it doesn't bring the two sides any closer to a 'big' deal -- perhaps even the opposite," he added. "By striking this truce, Trump has effectively alleviated much of the pressure on Beijing, meaning that the Chinese leadership won't be in a rush to make any concessions on the real issues anytime soon."

Economic data from China Monday showed the world's second-largest economy is feeling the effects of the trade war, with exports falling 3.2% in September, and exports to the U.S. falling by 22%. Along with the 11th straight decrease in imports from the U.S., the bilateral trade surplus contracted for the first time since February. Overall though China's trade surplus globally rose to $39.65 billion in September, from August's $34.8 billion, as imports fell faster than exports.

Investors were also eyeing developments in negotiations over Britain's exit from the European Union, after optimism that a deal could be reached rose Friday following productive negotiations (http://www.marketwatch.com/story/brexit-hopes-fuel-fresh-rally-for-the-british-pound-2019-10-11) between U.K. Prime Minister Boris Johnson and Irish Prime Minister Leo Varadkar on the difficult question of the customs border between Britain's Northern Ireland and the Republic of Ireland.

The British pound , however, retreated Monday (http://www.marketwatch.com/story/pound-pulls-back-from-three-month-highs-as-hopes-dim-over-brexit-agreement-2019-10-14), after the European Commission said late Sunday that "a lot of work remains to be done" to finalize Brexit, while questions remain as to whether British Parliament will accept a deal negotiated by Johnson.

Trading volumes may be lower Monday due to the U.S. Columbus Day holiday which closes federal government offices and the U.S. Treasury bond market but leaves the stock and commodities markets open.

Which stocks are in focus?

Shares of Dow component Boeing Co. (BA) rose after the company's board said late Friday that it voted to separate the roles of chief executive and chairman as the company has struggled to deal with issues related to the groundings of its 737 Max jet.

The aviation company said Dennis Muilenburg will continue as CEO, president and a board member, while David Calhoun, the current independent lead director, will become non-executive chairman.

Fellow Dow constituent Nike Inc.'s (NKE) stock was on the rise, up 1% after it was upgraded to neutral (http://www.marketwatch.com/story/nike-sportswear-jordan-brand-drive-upgrade-at-bank-of-america-2019-10-14) from underperform by Bank of America Merrill Lynch, based on a bullish outlook for the company's sportswear business.

Shares of Fastenal Co. (FAST) were under pressure Monday after the stock was downgraded to "market perform" from a "strong buy" by Raymond James. The stock rallied 17.2% Friday (http://www.marketwatch.com/story/fastenals-stock-rockets-toward-best-day-in-19-years-after-earnings-beat-2019-10-11) after the company reported better than expected earnings for the quarter ended Sept. 30.

Sempra Energy(SRE) announced Monday that it would sell its equity stakes in its Chilean businesses for $2.23 billion in cash to State Grid International Development. Shares were unchanged in premarket trade.

Parsely Energy Inc. (PE) shares declined after it (http://www.marketwatch.com/story/parsley-energy-to-buy-jagged-peak-in-an-all-stock-deal-valued-at-23-billion-including-debt-2019-10-14)(PE)announced (http://www.marketwatch.com/story/parsley-energy-to-buy-jagged-peak-in-an-all-stock-deal-valued-at-23-billion-including-debt-2019-10-14) the acquisition of Jagged Peak Energy Inc. (JAG) in an all-stock transaction.

Shares of Aecom(ACM) rallied Monday after the infrastructure company said its selling it's management services business (http://www.marketwatch.com/story/aecom-shares-jump-premarket-on-news-to-sell-management-services-business-for-2405-billion-2019-10-14) to American Securities LLC and Lindsay Goldberg for $2.405 billion.

How are other markets trading?

In commodities, crude oil prices fell about $1.46 to $53.25 on the New York Mercantile Exchange. Gold futures rose $5.80 to $1494.60 an ounce. The U.S. dollar , meanwhile, edged 0.2% higher against a basket of its peers.

In Asia overnight (http://www.marketwatch.com/story/asian-markets-rise-on-relief-over-partial-us-china-trade-deal-2019-10-13), the China CSI 300 rose 1.1%, while Hong Kong's Hang Seng index added 0.8%. Markets in Japan were closed for a holiday. In Europe, shares were mostly lower (http://www.marketwatch.com/story/european-stocks-slink-back-on-warier-view-of-us-china-brexit-talks-2019-10-14), as evidenced by the 0.5% decline in the Stoxx Europe 600 index .

(END) Dow Jones Newswires

October 14, 2019 11:01 ET (15:01 GMT)