July 10, 2017
Trump returns from the G-20 to more Russia questions, oil drops below $44, and U.K. businesses warn that no deal on Brexit isn’t an option. Here are some of the things people in markets are talking about today.
President Donald Trump returns from a G-20 meeting which highlighted the increasing isolation of the U.S. on the international stage to further questions about his administration’s ties to Russia. President Donald Trump’s eldest son met last year with a Russian woman who offered to provide potentially damaging information on Hillary Clinton, according to a report from The New York Times. Donald Trump Jr. said in a statement that he was joined by Jared Kushner and Paul Manafort at the meeting which he said provided no details or supporting information.
A barrel of West Texas Intermediate for August delivery was trading at $43.90 as of 5:25 a.m. Eastern Time. Sentiment towards the commodity remains negative despite an invitation to Libya and Nigeria, two countries exempted from the OPEC production cut deal, to attend a July 24 meeting in Russia where they may be asked to cap output. In the medium term, there are signs that the low crude price will hit production as older oil fields are being killed off at the fastest pace in a quarter of a century. Meanwhile, Abu Dhabi’s state-owned energy giant says it might sell shares.
U.K. Prime Minister Theresa May is set to ask opposition lawmakers for help with guiding Britain out of the European Union as she is set to publish legislation to shift EU laws on to the British statute in the so-called ‘great repeal bill.’ A survey by the British Chambers of Commerce showed that ‘no deal’ on Brexit isn’t a viable option, with only 2 percent saying that a reversion to World Trade Organization rules would be an acceptable objective. Economic data, meanwhile, continues to point to weakening prospects, with a report by IHS Markit and Visa showed that consumer spending fell 0.3 percent in the second quarter, the worst performance since 2013.
Overnight, the MSCI Asia Pacific Index gained 0.3 percent, while Japan’s Topix index added 0.5 percent as markets in the region reacted to Friday’s positive U.S. jobs report. In Europe, the Stoxx 600 Index was 0.3 percent higher at 5:45 a.m. with banks among the biggest gainers. U.S. market futures pointed to a modest gain at the open.
CEO Elon Musk flipped the switch on the production line for the $35,000 Model 3 on Friday — with the first car produced belonging to Musk himself. The success of the vehicle, for which Tesla has already taken roughly half a billion dollars in deposits, is seen as critical for the future of the company. Tesla has seen its share price tumble 13 percent in the last week as fears about production and competition from other automakers increase. The company says it intends to ramp output of the Model 3 from 100 cars in August to 20,000 a month by December.