Monday, July 9, 2018
Kicking off a new week of trading, we see everything’s gone green (apologies to Bernard Sumner): major indexes, gold and other precious metals, even foreign markets overnight closed up. We can see why here at home, with new employment numbers Friday continuing their robust multi-year upswing. There is also a big NATO meeting this week, which, it would seem, there is some hopefulness that the summit in Brussels will usher some agreement among participants about the burgeoning global trade war.
Currently, what’s on President Trump’s mind, is that neighbor NATO countries are not pulling their weight in contributions to the group; only the U.S., U.K., Greece, Poland and Estonia are paying at or above their 2% of GDP target. This is something Trump campaigned successfully on, and he continues to verbally hammer away on NATO members via Twitter (TWTR - Free Report) this morning.
Complicating matters is the planned meeting in Helsinki after the NATO summit between Trump and Russian President Putin, who himself will likely be a main topic of discussion among NATO allies. So expect pushback on Trump’s assertions that other members pay their fair share with accusations that Trump is cozying up to the non-NATO leader most feared having a negative impact in Eastern Europe, looking ahead.
Further, as Brexit progresses in the U.K., we see Secretary David Davis stepping down from his post during the transition. While stating on his way out the door that he likes British Prime Minister Theresa May and wishes to see her stay on to lead the U.K., that such an important cog in the wheel of Brexit fulfillment is going un-staffed for the time being, it may be seen by some that the transition is proving difficult. A key question going forward is, will more cabinet members step down before the transition is complete, or will others hold firm?
Certainly, a more solidified NATO alliance and U.K. transition team — not to mention fewer question marks regarding the Trump-Putin relationship — who put investors minds at ease more fully than current conditions appear to warrant. However, the green futures we’re seeing nearly across the board feel like something of a relief.
Perhaps no news is good news at this point, with hopes that measures break toward the positive this week as these meetings take place and are being reported. But these events will be worth keeping an eye on.
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