Markets Digest Growing Tariff Threats

Yesterday, President Trump sent out letters to 14 countries, headlined by Japan and South Korea, threatening to raise tariffs starting on August 1st if new trade deals are not reached by then. This news knocked US indices down 0.8%-0.9% and put pressure on markets sensitive to the health of the global economy, particularly Copper.

Today finds world markets consolidating yesterday’s moves and waiting to see what happens next, particularly who may be targeted with warning letters today. With a light economic calendar this week and earnings season not starting until next week, the tariff dispute remains the dominant focus.

Dow futures are down 0.1% this morning, while NASDAQ futures are up 0.3%. Over in Europe, the Dax is up 0.4% while the FTSE is up 0.2%. With the US 10-year treasury note yield climbing back up above 4.40%, the US Dollar is climbing this morning, posting gains of 0.2%-0.3% against the Loonie, Euro, Yen and Gold. Commodity action is mixed with Copper up 0.1% and Crude Oil down 0.2%.  

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