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Top 5 Things to Know in the Market on Friday

EconomyFeb 08, 2019 22:01
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© Reuters. - Here are the top five things you need to know in financial markets on Friday, February 8:

1. Trade Talks Teeter

U.S. President Donald Trump does not plan to meet with Chinese President Xi Jinping before the March 1 deadline to sign a trade deal, prompting a sell-off in Asian stocks overnight, while Wall Street shares slumped.

The lack of a meeting between the two leaders dampens hopes of a trade deal and increases the chance of increased tariffs between the two biggest economies in the world.

"Investors are getting nervous as the market had been optimistic about a resolution of the trade dispute since the beginning of the year," said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.

U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are expected in China next week for another round of trade talks to push for a deal and avert a March 2 increase in U.S. tariffs on Chinese goods.

2. Dollar Rally Holds Near Two-Week High

The greenback was higher on Friday amid reports that the U.S. and China are unlikely to end their trade war before the March 1 deadline.

Trade uncertainty tends to support the dollar, which is considered a safe haven in light of trade tensions.

The U.S. Dollar Index, which tracks the greenback against a basket of other major currencies, was at 96.387 as of 5:29 AM ET (10:29 GMT).

A pause on rate increases by the Federal Reserve has put some pressure on the dollar, as lower interest rates tend to drive investors towards riskier assets. Recent comments from Fed officials supporting the rate hold have also weighed on investors.

Dallas Fed Chairman Robert Kaplan – one of the Fed’s more hawkish members - said in a speech Thursday that the stimulus from the 2017 tax cut is waning, while last year’s interest rate hikes haven’t yet had an effect on the economy.

“We would be well served and the country would be well served if we paused and were patient for some number of months and sort of get out of the way,” he said.

Read more:Trump Attempts Bold Move With Saudis On Venezuela Crisis, Russia Oil Deal: Barani Krishnan

3. Amazon CEO Jeff Bezos Accuses Tabloid of Blackmail founder Jeff Bezos has accused the National Enquirer's publisher of attempted blackmail amid allegations from the tabloid of his extramarital affairs.

Bezos accused American Media Inc. on Medium of demanding he call off an investigation into how the Enqurie obtained his personal text messages.

“Rather than capitulate to extortion and blackmail, I’ve decided to publish exactly what they sent me, despite the personal cost and embarrassment they threaten,” Bezos wrote. “If in my position I can’t stand up to this kind of extortion, how many people can?”

Bezos, who also owns the Washington Post, is currently in the midst of a divorce from wife MacKenzie Bezos, with some speculating she could be entitled to half of his 16% shares of as the two did not have a prenuptial agreement.

Shares of Inc (NASDAQ:AMZN) were down 0.76% in premarket trade.

4. Crude Prices Fall as OPEC Faces U.S. Legislation Threats

Crude oil fell to a one-and-a-half low amid news that Congress is pushing forward on legislation that would make it possible for the U.S. government to prosecute OPEC countries for fixing oil prices.

Congress has pursued such legislation in the past but is seen as more likely to pass this time, as Trump has accused OPEC of manipulating the price of oil.

The “No Oil Producing and Exporting Cartels Act 2019”, or Nopec, bill was approved by the judiciary committee on Thursday. It could soon face a vote by the House. A similar bill was introduced in the Senate and has support from both parties.

Worries over a global economic slowdown also weighed on the commodity, as the European Commission slashed forecasts for euro zone growth over the year, citing global trade tensions.

Crude oil futures were at $52.61 a barrel, while Brent Oil Futures, the benchmark for oil prices outside the U.S., rose 0.4% to $61.89.

5. Saudi Shock

Saudi Arabia's crown prince and de facto ruler Mohammed bin Salman threatened to have Jamal Khashoggi killed a year before he was finally murdered in a Saudi Arabian consulate in Turkey, the New York Times reported.

It cited U.S. officials familiar with intelligence intercepts.

The allegations could again complicate the U.S. administration's oil diplomacy, as well as projected arms sales to the desert kingdom

-Reuters contributed to this report.

Top 5 Things to Know in the Market on Friday

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