Following the G20 summit in Osaka where cooperation won the day, investor sentiment was bullish. PMI numbers released today from a number of countries has cast a pall on global equities, tempering what was still a strong start to the day domestically, where equities continue to rally, setting new all-time highs in the S&P 500 before retracing.
President Donald Trump, after meeting Xi Jinping on Saturday, said the U.S. would not issue new tariffs on the remaining $350 billion of Chinese goods. Trump also said he would allow U.S. companies to sell products to Huawei, which had been subject to a ban.
Which products U.S. companies can sell to the Chinese tech giant is still unclear, but with negotiations back underway, we can expect more information soon.
Chinese PMI printed 49.4, below the 50 midpoint that delineates expansion and contraction, a troubling sign for the already uncertain economy. Korean trade data for June also indicated weakness as exports slowed 13.5%.
Germany, the E.U., and Great Britain all posted sub-50 PMIs as well, establishing a pattern of mild contraction.
Oil prices were up 2.5% following comments at the G20 summit by Vladimir Putin, who, along with Saudi Arabia, agreed to extend OPEC's oil production cut by another six to nine months.
A multilateral group of countries led by Russia is meeting with OPEC today and tomorrow in Vienna.
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