U.S. stock-index futures switched between small gains and losses on Monday, as investors turned their attention to a highly anticipated summit between President Donald Trump and North Korean leader Kim Jong Un in Singapore following a tense Group of Seven meeting over the weekend.
What are markets doing?
Dow Jones Industrial Average futures
were up 17 points at 25,338.00. S&P 500 futures
switched between small gains and losses, last trading flat at 2,782.25, and Nasdaq-100 futures
gave up early gains, losing 8 point at 7,168..
The Dow Average on Friday finished with its best weekly gain since March, heading into the Quebec meeting between the U.S. and its allies in the G-7. Friday’s moves left the Dow Jones Industrial Average
up by 2.8% last week, and allowed the S&P 500
to rise 1.6% and the Nasdaq
to gain 1.2% on a weekly basis.
What’s driving the market?
The weekend saw a fresh escalation of tensions between Trump and Canadian Prime Minister Justin Trudeau. The spat erupted after the G-7 meeting in Quebec ended Saturday, with Trump withdrawing his support for the group’s communiqué after Trudeau criticized U.S. tariffs on Canadian metals.
But, so far, “markets have proved remarkably sanguine about the threat of a global trade war and the dramatic events this weekend don’t seem to have changed that stance, with equity markets dismissing the potential threats,” said Rebecca O’Keeffe, head of investment at Interactive Investor, in a note early Monday.
Fair Trade is now to be called Fool Trade if it is not Reciprocal. According to a Canada release, they make almost 100 Billion Dollars in Trade with U.S. (guess they were bragging and got caught!). Minimum is 17B. Tax Dairy from us at 270%. Then Justin acts hurt when called out!
— Donald J. Trump (@realDonaldTrump) June 11, 2018
Meanwhile, top U.S. economic and trade advisers also lashed out at the Canadian prime minister, with Peter Navarro, the White House National Trade Council director, saying that there was “a special place in hell” for Trudeau.
Trump is now in Singapore preparing for Tuesday’s much-anticipated meeting with North Korean leader Kim on Tuesday. The first meeting between a sitting U.S. president and a North Korean leader is scheduled for Tuesday at 9 a.m. Singapore time, or 9 p.m. on Monday Eastern Time.
Away from international relations, investors will also begin to focus on central bank meetings this week. The Federal Reserve is expected to raise interest rates after its two-day meeting that begins Tuesday, while European Central Bank policy makers are expected to announce the timing of a reduction of its crisis-era asset-purchase initiative on Thursday.
What strategists are saying
“Although meetings between world leaders are typically not considered market events and would usually encourage a muted market reaction, this summit risks being viewed differently,” wrote Jameel Ahmad, global head of currency strategy at FXTM, in a note discussing potential winners and losers coming out the meeting.
“Uncertainty over the past year or so around Trump-Kim Jong Un relations was seen as one of the major risks for the financial markets. A reduction of this uncertainty should encourage investors to carry on investing in global stocks” if the meeting ends on a positive note, he said. But “depending on the extent to which the summit might go down an undesirable path, there is the likelihood of investors entering a ‘risk-off’ mode if negative headlines overshadow the meeting,” he added.
Also from the M&A front, privately held Mars Inc. said it’s buying AniCura in a deal that values AniCura at close to €2 billion ($2.36 billion) including debt, allowing Mars to push further into the lucrative business of pet care.
What is ahead in economic data?
Monday’s only scheduled top-tier data is a survey of consumer expectations, due at 11 a.m. Eastern Time.
How are other markets performing?
Asian markets saw a cautious day of trade, while European stocks
rose, led by a rally in Italian stocks
after Italy’s economy minister said the country’s new government is committed to sticking with the euro.
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