Futures on the S&P 500, Dow and NASDAQ 100 attempted to defy increasing geopolitical risks this morning—ahead of a much-anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping and amid further escalation of the U.S.-Iran standoff. Secretary of State Mike Pompeo signaled the U.S. would pursue new sanctions and a "global coalition" against the Middle East oil producer on Monday, in the face of recent oil tankers and drones attacks—thereby further boosting WTI prices.
The STOXX 600 slid for a second day after after a profit warning by Mercedes-Benz maker Daimler (DE:DAIGn) and a dip in German business confidence to the lowest level since 2014 dampened sentiment. Even more impactful news came from China, which is seeking clarifications from FedEx (NYSE:FDX) on temporarily halting shipping of Huawei products. The Chinese telecom giant accused FedEx of a “vendetta” after the courier refused to deliver P30 Pro phones from the U.K. to the U.S. FedEx now runs the risk of being blacklisted by China as an “unreliable entity,” thereby adding fuel to the fire of a prolonged trade spat between the world’s two largest economies that saw a new peak in May when the White House barred U.S. firms from doing business with Huawei without a special licence.
As if that wasn't enough, the U.S. added five Chinese companies operating in supercomputing with military-related applications to its trade blacklist on Friday, citing national security.
Another stumbling block in U.S.-China relations is the thorny Hong Kong's extradition bill issue. China said on Monday it will oppose the addition of the recent face off between the Honk Kong government and millions of civil protestors to the G20 agenda. Meanwhile, calls are mounting from Hong Kong civil rights proponents that the U.S. passes new legislation to sanction their country's government.
In the earlier session, Asian shares were spared from the latest diplomatic salvo, with news on FedEx only becoming available to the public later in the day. All the major regional indices closed in the green on hopes that a Trump-Xi meeting during the G20 summit will mark a bottom to the past year's trade-led selloffs.
The MSCI Asia-Pacific index outside Japan edged 0.2% higher, hovering not far from Thursday's six-week high.
Meanwhile, another stumbling block in U.S.-China relations is the thorny Hong Kong's extradition bill issue. China said on Monday it will oppose the addition of the recent face off between the Honk Kong government and millions of civil protestors to the G20 agenda. And calls are mounting from Hong Kong civil rights proponents that the U.S. passes new legislation to sanction their country's government.
Yields on 10-year Treasurys fell again, potentially ending a return move after rates completed a bearish flag 10 days ago.
The dollar resumed a selloff, tracking yields, after extending a breakdown of its uptrend line of the year as well as the 200 DMA.
Add a Comment
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.