On Monday, U.S. stocks finished the day on the rise despite the troubling events of the previous G-7 summit. This is within the context of a week that will be filled with diplomatic events and several changes in the political and economic landscapes of the country.
The possibility of a favorable outcome from the U.S.-North Korea summit has given investors confidence that was lacking in earlier weeks, mostly due to the trade wars with American allies. More specifically, the S&P 500 rose by the end of this past Monday.
Throughout the meeting between President Donald Trump and North Korean Leader Kim Jong-un, there have been several indications of an improvement in the two countries’ relations. Trump proudly stated after the talks: “We both want to do something. We both are going to do something. And we have developed a very special bond. People are going to be very impressed. People are going to be very happy.” He then confessed that the meeting exceeded his expectations, also stating during the summit his belief that communication between the two countries “is going to be a very much different situation than it has in the past.”
Despite this, the president mentioned that the denuclearization process was at its very early stages and that Monday’s meeting was targeted more towards solidifying his bond with the Supreme Leader. In fact, even though North Korea’s compromise to its own denuclearization was confirmed and restated in the negotiations, no specific procedures have been stated for either country. However, a change from the confrontational tone the countries had towards each other during past months has been enough to make investors and Wall Street in general look forward to a prosper future for U.S. stocks.
The Nasdaq Composite increased 0.19 percent, while S&P 500 increased 0.11 and the Dow Jones Industrial Average 0.02 percent. This is a significant difference from previous changes in the Dow, which earlier this month decreased 1.6 percent due to trade tensions and Italy’s political landscape at the time. In fact, the Dow reached a seven-month low value during April, which helped finance experts predict economic growth for the mid-year.
Another event that helped the stocks was the Treasury Department’s selling of 54$ billion worth in new coupon-bearing supply, as reported by rushhourdaily.com! Finance. The demand was also high for the department’s three-year notes, which was sold for a yield of 2.664 percent, and ten-year ones.
Investors seem to have ignored a complicated and flat-out problematic G-7 meeting over the weekend, where President Trump left the summit early and withdrew from the usual joint communique between the leaders. The meeting, which was originally planned to address the ongoing trade war between the U.S. and its allies, ended up worsening the situation from all perspectives.
The relationship between the U.S. and Canada came out particularly damaged, as Trump mentioned his disapproval of Canadian Prime Minister Justin Trudeau’s actions. This makes reference to Trudeau’s response to current trade tariffs implanted by the U.S., where he stated: “The idea that we are somehow a national security threat to the United States is quite frankly insulting and unacceptable.” One U.S. official even went as far as to say that “there is a special place in hell” for the Prime Minister during an interview. This also hurt the Canadian dollar, which fell 0.45 percent.
Another leader that also confronted the U.S.’ treatment of its allies, and Trump’s early departure from the meeting, was German Chancellor Angela Merkel. She called his procedures “sobering” and “depressing”, and stated that Europe in general is ready to retaliate the administration’s measures with counter-tariffs.S he remarked that this summit did not mark an end to the relationship between the U.S. and Europe, yet it highlighted the need for the latter to not rely upon its transatlantic partner moving forward.
