The highly anticipated G20 meeting is getting underway and it could have some substantial effects on markets. The Saturday meeting between U.S. President Donald Trump and Chinese President Xi Jinping will almost certainly be a primary area of focus.
Will Middle Ground Be Found?
The ongoing trade war between the U.S. and China has thus far shown no signs of slowing. The two nations have been engaged in a tit-for-tat tariff program and neither side seems willing to back down. Whether you believe in the leaders’ agenda or not, the effects of tariffs are already being felt in both countries and some significant price increases could be down the pike as companies are forced to pass higher costs onto consumers.
President Trump has alluded to a potential deal being close in recent days, although such negotiations may be considered extremely fragile at this point and could fall apart if the two nations are unable to find some common ground over the weekend. The President was quoted in an article from reuters.com as saying “I think we’re very close to doing something with China, but I don’t know that I want to do it.”
With so much at stake over the weekend, markets may find themselves slightly on edge today. In addition to the key U.S./China meeting taking place, investors are also likely paying attention to any ongoing developments in the Mueller probe. According to cnn.com, President Trump has canceled a meeting with Russian President Putin that was set to take place ahead of the G20 summit. The administration stated that the reason for the cancellation was due to Russia’s refusal to release Ukrainian navy ships and sailors seized during a maritime confrontation last weekend. The cancellation came after former Trump attorney Michael Cohen pleaded guilty to lying to Congress and suggested that there is more to Trump’s business dealings with Russia than has been previously disclosed.
Stocks are mixed today heading into the weekend while gold is moving lower. Gold is currently working lower, with prices down $3.95 per ounce at 1220.15. The yellow metal is seeing some further selling pressure as oil hits a new daily low and as the dollar index adds to overnight gains. The results of this weekend’s meetings could have a significant impact on global markets, and both stocks and the dollar could be on the move next week.
Price action may be relatively muted today ahead of the G20, while Monday could potentially see some fireworks based on how the summit goes.