It's time now for a look at the market action this afternoon, and for that I'm joined on the line by Dr. Hwang Seiwoon, research fellow at the Korea Global Market Institute.
Dr. Hwang, thanks for coming on today.
So, Wall Street overnight saw mixed results. Playing a role were the new sanctions on Iran and the uncertainty ahead of America's trade talks with China. The Dow up just slightly and the S&P down point-1-7 percent. What's the story today?
Stocks ended little changed Monday as traders looked ahead to a key meeting between President Donald Trump and Chinese President Xi Jinping at this week’s upcoming G-20 summit. Investors are hopeful the two leaders will get closer to a deal that will end the conflict. The likelihood of them coming together for a deal is pretty small at this point. Investors in risk assets have also continued to shrug off signs of an economic slowdown and focus on the increasingly dovish tone at central banks around the world.
Most Asian stocks declined Tuesday as traders mulled geopolitical strains and positioning for the upcoming U.S.-China summit meeting. Shares in China and Hong Kong led losses, with benchmarks in Tokyo and Seoul reversing earlier gains. Japan’s Nikkei dropped 0.71 percent, while Shanghai Composite lost 1.82 percent. South Korea’s KOSPI fell 0.39 percent as of close today.
The new U.S. sanctions on Iran have raised tensions in the Middle East and put pressure on oil prices. West Texas up 8 tenths of a percent. Where do you see oil supply and prices going in the short term?
Oil fell on Tuesday amid concerns over the outlook for crude demand, but prices were supported after Washington announced new sanctions on Iran amid mounting tensions in the Middle East. The new sanctions would appear to rule out any talks or negotiations to end the crisis between the U.S. and Iran.
Hopes are waning for progress in Sino-U.S. trade talks at this week’s G20 meeting. This could further hurt global growth prospects, hitting demand for oil and other commodities. This means the demand would become slimmer in the near-term with deteriorating economic condition.
However, supply is expected to remain relatively tight, as the Organization of the Petroleum Exporting Countries and its allies including Russia appear likely to extend a deal on curbing output when they meet in the beginning of July.
Now, the Bank of Korea shows consumer sentiment in June down for a second straight month to 97-and-a-half. That of course is a sign there are slightly more pessimists than optimists. Why would that be?
South Korea's consumer sentiment dropped slightly from a month earlier to a five-month low in June amid fears of an economic slowdown sparked by sluggish exports and a trade dispute between the world's two largest economies. The drop apparently follows the escalating trade tension between the United States and China that many believe may last months if not years. The two countries are also the world's two largest importers of South Korean goods.
South Korea's exports have dipped for six consecutive months, with shipments to China falling for seven consecutive months since November. The country's exports again plunged 10 percent on-year in the first 20 days of this month.
Those surveyed saw no changes in their current living conditions from a month earlier or six months from now. However, more people saw their spending shrinking down the road due to worries on economic slowdown.
Alright, Dr. Hwang. That's where we'll have to leave it today.
Thanks again for coming on.
We appreciate your insights.