Hello Everyone, I hope you are enjoying the beginnings of the summer months. The current market activity seems much more dramatic than the typical sleepy and dull summer markets of the past. From trade tensions to saber rattling in the Gulf there are may hot spots we will need to digest as price action searches for direction.
This week’s Sound Bites:
• We are seeing the Trade Negotiations with China as dominating the markets but those companies with less exposure to China are slightly better than those that are. Semiconductor stocks are getting taken to the woodshed, especially those tied into to suppling chips to Huawei Technologies.
• As a reminder, late this past week the US imposed curbs on US companies from dealing with Huawei which dramatically expands the trade negotiations towards longer term security and spying… And as the Trade War moves forward we are seeing the US place more focus on only on China by lifting the steel tariffs to Canada and Mexico to speed forward the USMCA (US-Mex-Can) trade deal while also delaying the possible auto tariffs on Europe by 6 months.
• Sabers are rattling in the Persian Gulf with the US and Iran as already high tensions further escalate when the US imposed very strict Oil export restrictions on Iran while Iran is threatening US forces in the region. All of this of course makes the Oil markets very volatile not to mention the issues going on in Libya and Venezuela…
• And given all these Geo Political issues the markets are still placing bets the Trade Tiff with China will be resolved, perhaps not in the next 60 days but tensions will be reduced with Trump planning on meeting with Xi in Osaka, Japan at the G20 around June 21st and over the next year a resolution will be more firmly in place. And the tensions in the Persian Gulf are only a concern at this time for the Oil markets with any military responses not factored into market price.
Enjoy our Weekly Round-Up
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