Summary for the 11th of February 2019


With The Federal Reserve’s announcement that it would be patient with the contractionary policy, the earnings reports for the forth quarter of 2018, the US government shutdown and the Brexit issue. All these factors have been occupying the attentions from the trade conflict between the US and China. Last week, however, the attentions were back to the trade conflict when President Trump said he wouldn’t be meeting with China’s president, Xi Jinping, before the first of March, when the tariff ceasefire expires.

The United States Trade Representative, Robert Lighthizer and The U.S Secretary of the Treasury, Steven Mnuchin are in Beijing this week to continue the trade negotiations. If the two countries cant come  to an agreement, the US will increase the tariffs on 200bn. dollars worth of Chinese goods from 10% to 25%. The implementations of tariffs on more Chinese goods will most likely follow afterwards.

The prime minister of the UK, Theresa May will be presenting a new Brexit plan for the British parliament on Thursday. The EU still stays firm on the previous Brexit plan. May is trying to change the backstop deal, a deal which involves the Irish border, this is to avoid a physical border between Ireland and Northern Ireland. For now, the whole United Kingdom (inkl. Northern Ireland ) is a part of EU’s custom union until Brexit agreement is finalized. Brexit supporters fear that the United Kingdom will be a part of EU’s custom union permanently. May wishes to make this backstop solution temporarily. We just have to wait and see what May and the EU will agree on.

Indices on 11th of February: The market has turned the focus on the trade negotiation between the US and China, and the risk of another government shutdown.  

Dow: -0.3% (8th of February )
S&P 500: +0.1% (8th of February)
Nasdaq: +0.2% (8th of February)
Nikkei: Closed.
Chinese indices: +2.2% (11th of February)
STOXX Europe 600 Index: +0.85% (11th of February)

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