US-China trade conflict steams ahead

Weekly Report - 15/07/2019

US-China dispute Spreads to World Economy

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The US administration typically bloviating its way through this manufactured crisis, simply refrained from the next stage of escalation following the G20 Osaka hoedown. Then called it a tremendous achievement. So much for bloviation. However, for the world’s economy the difficulties imposed on the trading system resulting from the ham-fisted approach the US administration takes to dealing with Chinese intransigence and recalcitrance in its race for economic domination are mounting.

The week that was


Staying well within the $55-65 price range, crude is not reacting to inventory updates or supply and demand data generally. For what is driving the price resiliency is the mounting tension in the Middle East. Months of ship holing, tanker seizure and attempted seizure, and the huge naval and air armada currently in theater and steaming into it have traders on edge. As yet, the price is stable within its range. However, with so much fuel accumulating in the volatile region, the US administration tightening the economic and financial nose week in and week out, and the Iranians expressing their chaffing but doing so without falling into the US trap, it seems like it is only a matter of time before the wire is tripped.

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The week ahead


Once again, earnings report season is upon us. It is not expected to be the barnburner that the last few quarters have brought us. For reason touched upon above, global economic activity is slowing and with that of course come reduced corporate earnings. The bell weathers are the giant financial houses who start the season off. In the event that the earnings reports do indeed prove weak, the SP 500 could reflect the slow down by falling. Conversely should the season kick off strongly, look to the major indices to keep on moving upwards.

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