Memorial Day gave traders a day off. Cryptocurrencies could still be traded, but the stock market was completely closed. Futures traders however, didn’t have Memorial Day off. The President shared a very big trade deal with Japan and that sent the Dow Jones Industrial Average Futures upwards.
The news was welcomed overseas as the Japanese Nikkei index also rose because of the trade deal possibilities.
— The White House (@WhiteHouse) May 27, 2019
Wall Street could definitely take a breather from the trade wars. This month saw the Dow lose a little over 4% and was the 5th straight month of decline. Now, with the DJIA futures up 0.11%, S&P 500 futures also rose 0.03%. Japanese traders managed to push up the Nikkei up by 0.31%.
Trade deal on the horizon
While visiting Japan, the President met with Prime Minister Shinzo Abe. The two addressed the large trade imbalance between the two nations. Monday’s press conference saw the President hinting at large steps being taken to remove the trade barriers.
Great progress being made in our Trade Negotiations with Japan. Agriculture and beef heavily in play. Much will wait until after their July elections where I anticipate big numbers!
— Donald J. Trump (@realDonaldTrump) May 26, 2019
The trade deal would probably begin to shape in the next two months. There is the time-sensitive issue of Japan’s upper house elections which will be held in July. Trump stated:
“I believe we that trade-wise, we will be announcing some things in late August, which will be very good for both Japan and the United States.”
After the trade wars with China roughed up both sides, Trump is beginning to soften his trade war rhetoric. It became clear that these trade wars would be long and would probably have no winner.
The President previously threatened tariffs on $50 billion worth of Japanese vehicles. This widening trade deficit was initially called a “security threat” by the President, but the comment was later mended:
“When I talk about a security threat, I’m talking about a balance sheet.”
This new trade deal with Japan will be centered around agriculture and beef. The President also commended the Japanese people on their negotiation abilities:
“They are brilliant businessmen, brilliant negotiators and put us in a tough spot. I believer however, that a deal with Japan will be made.”
This sigh of relief is welcomed by Wall Street, but there are still clear topics of disagreement between Japan and the United States. The biggest differences come when North Korea and trade are discussed.
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