May 14, 2019, by Lorcan Roche Kelly
“I have a feeling”
President Donald Trump said that he feels talks with China “are going to be very successful” as he confirmed he will meet President Xi Jingping at next month’s G-20 summit. His comments came after the U.S. Trade Representative’s office released the list of $300 billion of Chinese goods that are next in line for a 25% tariff while Beijing announced its own trade measures. Trump may be coming under pressure from inside the Republican party as the standoff is increasing pain for American farmers, among the president’s most loyal supporters. Markets are recovering some of the worst of yesterday’s sell-off as hopes of a deal linger.
U.S. Secretary of State Michael Pompeo received a cool response from European Union allies at a meeting in Brussels where he tried to persuade leaders in the region to take a harder line towards Iran. EU foreign-policy chief Federica Mogherini called for “maximum restraint from all sides.” Trump warned that Iran will “suffer greatly” if it does anything that leads to an outbreak of hostilities with the U.S. Between geo-political tensions and the trade war, the oil market is getting pulled in different directions.
There are some signs this morning that Uber Technologies Inc.’s post-IPO plunge may be easing, with shares slightly higher in pre-market trading. That is unlikely to distract from questions over the company’s two-day 18% tumble. The debate over how well Morgan Stanley and other banks handled the hotly anticipated offering is complicated by the very unlucky timing of the float. Speaking of the latter, Bayer AG shares fell to the lowest level in almost seven years this morning as a jury awarded $2 billion (yes, with a b) in damages in a California court case over Monsanto Co.’s Roundup weedkiller. Bayer bought Monsanto in June of last year.
Overnight, the MSCI Asia Pacific Index dropped 0.9% while Japan’s Topix index ended the session 0.4% lower, well off the session lows. In Europe, the Stoxx 600 Index was 0.6 percent higher at 5:50 a.m. Eastern Time as the region’s equities recovered some of yesterday’s losses on the softening of U.S. trade rhetoric. S&P 500 futures pointed to a gain at the open, the 10-year Treasury yield was at 2.412% and gold slipped.
U.S. April import and export price data is published at 8:30 a.m. Fedspeak continues, with Kansas City Fed President Esther George and San Francisco Fed President Mary Daly due later. Speaking in Europe earlier today, Federal Reserve Bank of New York President John Williams warned that central banks around the world should be reviewing their strategies to prepare for a future of slow economic growth and low interest rates. Investors will hope to get an update on the Canadian pot shortage when Tilray Inc. and Aurora Cannabis Inc. report earnings.