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MARKET OVERVIEW
Wall Street Less Impressed by Trump’s ‘Fantastic Trade Deals’ with China
- S&P 500 futures were down by 1% this morning, having gained 0.77% yesterday.
- In Europe, the Stoxx 600 fell 1.28%, while the UK’s FTSE 100 dropped 1.42% before noon.
- Asia: South Korea’s KOSPI slid 6.12%; Japan’s Nikkei 225 decreased by 1.99%; India’s Nifty 50 fell by 0.13%; and China’s CSI 300 saw a 1.12% drop.
- Brent crude rose to $109 per barrel this morning.
- Bitcoin is currently at $80.5K.
Global Stock Sell-Off: Stocks are experiencing a widespread sell-off as President Trump returned from his summit with China’s Xi Jinping, providing few details on the outcomes. Every major index in Asia and Europe has significantly declined. The South Korean KOSPI dropped over 6%, while the S&P 500 futures in the U.S. saw a 1% decrease before opening.
Just 200 Jets? Yesterday, Boeing’s stock fell 4.73% and dropped another 1.38% in after-hours trading following Trump’s announcement of a 200-plane sale from China. Last visit in 2017, 300 jets were sold, and sources had previously hinted at a potential 500 aircraft deal.
The Wall Street Journal’s coverage offered a succinct summary:
- Trump indicated both he and Xi desire stability in trade with Iran while labeling the recent deals as “fantastic” but lacking specifics. China’s government mentioned reaching “a series of new common understandings” with the U.S., without further details.
Analysts Express Disappointment
“A lot of fuel has been used for nothing meaningful. Xi’s declaration to maintain stable trade ties lacks credibility, considering the past 15 months of U.S. trade policy,” remarked UBS’s Paul Donovan to clients.
Deutsche Bank’s Jim Reid noted the lack of expected intervention from China regarding the Iran conflict: “Market momentum faded after Trump stated the U.S. doesn’t need to ensure the Strait of Hormuz remains open, increasing fears of prolonged energy disruption and inflation concerns.”
The stagnant situation regarding the Strait suggests continued high oil prices, currently at $109 per barrel. This impacts the dollar’s strength and fuels inflation, prompting the Federal Reserve’s hawkish stance, as seen in the bond market shifts.
Retail Traders Outperform the Market, According to Goldman
Retail trading volume has surged 28% since April, as reported by Goldman Sachs. Retail stocks have outperformed an equal-weighted S&P 500. Retail investors now control $12 trillion in equities, with their activities representing about 20% of total U.S. trading volumes, up from 15% a decade ago.
Goldman also created an index named “GSXURFAV” (Goldman Sachs’ Favorite Stocks), showcasing retail performance:
