Summary for the 18th of January 2019


The U.S Secretary of the Treasury, Steven Mnuchin, proposes lowering the tariffs on Chinese imports to calm down the market, but the United States Trade Representative, Robert Lighthizer, doesn’t seem to support this proposal. Robert Lighthizer is one of the key persons that can change President Trump’s strategy. There is no official statement about this news, but the market reacted positively.

The U.S and China are trying to find a solution to the trade conflict. President Trump knows that the market is weighted down by the trade conflict and a solution to the conflict will be received positively, this, and the struggling to get the Mexico border wall financed, leading to government shutdown, gives the President the incentive to find a solution with China as soon as possible.

On the other side, the Chinese government is losing the growth from its economy. It has deployed measures to keep up this growth. The Chinese government fears that multinational companies will relocate their businesses to other country in Asia. This gives the Chinese government also to as soon as possible, find a solution with the U.S.

The leader of the House of Commons in the UK, Andrea Leadsom, announces that the House will vote for a Brexit alternative on 29th of January, two months before the official Brexit date. One of the alternatives the House will be voting for is a new referendum. The leader of the Labour party, Jeremy Corbyn supports this alternative. The Conservatives party is supporting this alternative as well. Another alternative is for the UK to leave the single market, but stays permanently in the EU custom union, this alternative gets the support from The Democratic Unionist Party, the party wants a permanent solution for the Ireland border. A permanent custom union solution will risk splitting up the The Conservatives party.

The U.S Philadelphia Federal Index increased from a revised reading of 9.1 in December to 17 in January. This is in contrast with the EmpireState Manufacturing Index which fell from 11.5 in December to 3.9 in January. Together, both numbers indicate that the ISM Manufacturing Index will rise in January, and will be a good sign for the U.S economy after the fall of 5% in December.

Indices on 17th of January.
Dow: +0.8%
S&P 500 and Nasdaq: +0.7%
Nikkei: +1.3%
Chinese indices: +1.4%.

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