US Stocks Open Flat on Looming Trump-Kim Summit

By Investors Hub

The major U.S. index futures are pointing to a roughly flat opening on Monday as traders look ahead to several key events this week.

Traders may be reluctant to make any significant moves ahead of the historic summit between President Donald Trump and North Korean leader Kim Jong Un on Tuesday.

Ahead of the meeting, Secretary of State Mike Pompeo indicated the U.S. is prepared to offer North Korea ?different? and ?unique? security assurances in exchange for the complete, verifiable and irreversible denuclearization of the Korean peninsula.

In remarks last Thursday, Trump expressed some optimism about his meeting with Kim but stressed that he is willing to walk away from negotiations.

Trump said his administration has stopped using the term “maximum pressure” with regard to North Korea and suggested the success of the negotiations could be determined by whether he uses the words after the meeting.

In addition to the highly anticipated Trump-Kim meeting, traders are also looking ahead to monetary policy announcements by the Federal Reserve and the European Central Bank.

The Fed is widely expected to raise interest rates by 25 basis points, while the ECB has indicated the meeting will be used to discuss ending its bond purchasing program.

Meanwhile, trade concerns may continue to hang over the markets after Trump backed out of a joint G7 communiqué over the weekend.

Trump continued to hammer U.S. allies on trade after leaving the G7 summit early in order to attend the meeting with Kim in Singapore.

After an early move to the downside, stocks moved modestly higher over the course of the trading session on Friday. With the turnaround on the day, the Dow and the S&P 500 reached their best closing levels in about three months.

The major averages finished the day just off their highs of the session. The Dow climbed 75.12 points or 0.3 percent to 25,316.53, the Nasdaq inched up 10.44 points or 0.1 percent to 7,645.51 and the S&P 500 rose 8.66 points or 0.3 percent to 2,779.03.

For the week, the major averages moved sharply higher. The Dow soared by 2.8 percent, the S&P 500 surged up by 1.6 percent and the Nasdaq jumped by 1.2 percent.

The rebound by stocks as the day progressed came as traders kept a close eye on any developments out of the G7 summit in Canada.

The summit is expected to focus on trade relations amid the ongoing dispute over President Donald Trump imposing tariffs on steel and aluminum imports from Canada, Mexico, and the European Union.

Trump continued his tough talk on trade as he prepared to head to the meeting, arguing that the U.S. is being treated very unfairly on trade.

In posts on Twitter ahead of the summit, Trump lashed out at Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron.

“Please tell Prime Minister Trudeau and President Macron that they are charging the U.S. massive tariffs and create non-monetary barriers,” Trump tweeted.

He added, “The EU trade surplus with the U.S. is $151 Billion, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow.”

Trump described Trudeau as “indignant” for bringing up the relationship between the U.S. and Canada without mentioning Canadian tariffs on U.S. dairy products.

“Looking forward to straightening out unfair Trade Deals with the G-7 countries. If it doesn’t happen, we come out even better!” Trump tweeted.

In remarks to reporters before the leaving for the summit, Trump suggested Russia should be included in the meeting of major industrialized countries.

Housing stocks moved significantly higher over the course of the session, driving the Philadelphia Housing Sector Index up by 1.8 percent. The index climbed to its best intraday level in well over a month.

Transportation, biotechnology, and computer hardware stocks also saw some strength on the day, while oil service and semiconductor stocks moved to the downside.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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