Yahoo Finance Top 5 Things to Know in the Market on Monday
Investing.com - Here are the top five things you need to know in financial markets on Monday, May 21:
1. U.S. and China put trade war on hold
China and the U.S. agreed over the weekend to halt imposing punitive import tariffs as negotiators set up a framework to address trade imbalances.
U.S. Treasury Secretary Steven Mnuchin said on Sunday that the trade war with China is now put on hold. "We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework," Mnuchin said.
While the agreement means that both sides will avoid billions of dollars in tit-for-tat tariffs, China has yet to agree to cut the trade deficit despite President Donald Trump’s demand that the world’s second largest economy reduce its trade surplus by $200 billion.
2. Fed speakers in focus
With no major U.S. economic reports set for release on Monday, market participants will focus their attention on appearances from Federal Reserve policymakers as they seek to gauge plans for policy tightening.
Atlanta Fed president Raphael Bostic, Philadelphia Fed chief Patrick Harker and the head of the Minneapolis Fed, Neel Kashkari, will be giving speeches on Monday afternoon.
That said, the focus this week will undoubtedly be on Fed chairman Jerome Powell who will participate in a panel discussion of "Financial Stability and Central Bank Transparency" at the Sveriges Riskbank Conference in Stockholm, Sweden on Friday.
Markets are currently pricing in a rate hike at the next Fed meeting on June 12-13, in what would be the second move this year. The uncertainty lies on whether there will be a fourth increase in December with the odds currently hovering just above the 50% threshold.
3. Global stocks breathe sigh of relief over trade war pause
U.S. futures pointed to a higher open on Monday as global investors continued the rally with a celebration of the pause in the U.S.-China trade war. At 5:53AM ET (9:53GMT), the blue-chip Dow futures jumped 222 points, or 0.90%, S&P 500 futures rose 16 points, or 0.57%, while the Nasdaq 100 futures traded up 45 points, or 0.65%.
Elsewhere, European stocks traded higher on Monday, buoyed by the easing tension. Notably, London’s FTSE 100 hit a record high. However, Italian stocks bucked the general trend as worries continued over the prospect of two populist parties taking power. Germany’s stock market was closed for a holiday.
Earlier, Asian shares closed higher as traders celebrated Mnuchin’s announcement. China’s Shanghai Composite ended with gains of 0.6% while Japan’s Nikkei 225 closed 0.3% higher.
4. Dollar hits 5-month highs but balks at 94
The dollar hit a five-month high on Monday after U.S. Treasury Secretary Steven Mnuchin declared the U.S.-China trade war "on hold" following their agreement to suspend threatened tariffs.
At 5:454M ET (9:54GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.28% at 93.84, just off an intraday high of 93.97, its highest level since December 18.
Currency markets were taken by surprise as the dollar rallied in recent weeks, rising 5.4% in just over a month. It was the currency's biggest gain since the last quarter of 2015, when the Federal Reserve was preparing for its first rate increase since the financial crisis of 2008.
5. Musk doubles price on new Tesla Model 3
Tesla CEO Elon Musk revealed details over the weekend of a more powerful version of the Model 3 that will cost around $78,000, compared to the original $35,000 price tag on the base-model.
Musk tweeted on Saturday that the new version would be faster and more powerful, with a dual motor and all-wheel drive.
Shares of Tesla (NASDAQ:TSLA) were up around 2% in pre-market trade Monday.
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