- Negations aren’t going anywhere between the US and China
- Tariffs could be imposed on nuclear sector- uranium
- WTO and IMF cannot do their job properly
US futures are trading a little soft today. This is despite the fact that the trade spat between the US and China has taken a back seat. The negations aren’t going anywhere between the two counties- US and China and investors are underestimating this element. The US relation with the EU is also at its lowest point because of the trade war conflict. If the trade negotiations continue to remain in a stalled phase, we are facing a major problem.
A sector which is worth keeping a close eye on in the coming days is the nuclear energy. Trump administration is weighing in whether uranium imports imposes any threats to national security and if the answer is yes, tariffs would be introduced here as well. As a result of this, we have already seen a rally in US uranium miners but on the other hand, utilities that operate reactors faced some selling pressure. This is because if tariffs are imposed, it means higher input cost. Most of the uranium import is from Canada, Australia, Russia and Kazakhstan.
Of course, this kind of investigation adds more pressure in the International Monetary Fund and the risk elevates further. If the WTO and IMF cannot do their job properly and cannot perform the duties which they are supposed to do, the risk of their dysfunctional is massively high. We think this is the very reason that investors should not take their eyes off when it comes to the trade war and tariff issues.
The reason that we aren’t seeing any serious correction or sell off for the US stocks is that the Fed chairman struck an upbeat tone in his two-day testimony. He was confident about the economic health of the country. This made the dollar index to kiss its precious highs once again.
