Top 5 Things to Know in the Market on Monday - Investing.com

© Reuters.

Investing.com - Here are the top five things you need to know in financial markets on Monday, July 1:

1. U.S. and China reach trade truce

The U.S. and China agreed on Saturday to restart trade talks after U.S. President Donald Trump agreed to hold off on the implementation of new tariffs and also ease restrictions on tech company Huawei in order to reduce tensions with Beijing.

China meanwhile agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.

No deadline was set for progress on a deal, and the two sides still remain at odds over significant parts of an agreement.

Chinese state media suggested a long road remains ahead to reach a final deal and further disputes are to be expected.

2. Risk appetite boosted by trade relief

Global stocks registered solid gains on Monday as trade tensions eased, boosting risk appetite.

Asian shares surged more than 2% while European stocks jumped to a two-month high.

U.S. futures pointed to a triple-digit gain in the at the open, adding to a rally in June that was its best since 1938. jumped 256 points, or 1.0%, by 5:27 AM ET (9:27 GMT), rose 30 points, or 1.0%, while traded up 126 points, or 1.6%.

As investors put risk back on the table, safe haven assets such as , the and bonds were under pressure.

The pause in the Sino-U.S. trade dispute also reduced market bets that the Federal Reserve would cut later this year.

3. OPEC set to extend production cuts after Iran’s approval

OPEC and its allies appear set to extend oil supply cuts through the end of the year as they meet in Vienna on Monday and Tuesday after Iran joined top producers Saudi Arabia, Iraq and Russia in endorsing the policy.

Iranian Oil Minister Bijan Zanganeh told reporters on Monday he would support the proposal to prolong output cuts by six to nine months.

Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day by six to nine months - until December 2019 or March 2020.

Saudi Energy Minister Khalid al-Falih suggested that the deal would likely be for the full nine months and said that deeper cuts were not necessary.

surged nearly 3% on the news.

4. ISM on tap as global manufacturing weakens

Data released Monday revealed further signs of weakness in manufacturing activity worldwide, stoking concerns about the risk of a global recession and supporting the argument for central banks to boost stimulus.

Factory activity slowed in most Asian countries in June as the simmering U.S.-China trade conflict put further strains on the region's manufacturing sector.

Japanese also deteriorated to a nearly three-year low in the second quarter.

in the euro zone shrank faster than expected, contracting for a fifth straight month in June.

Although the U.S.-China trade truce was expected to provide some respite, analysts expressed doubts that it will lead to a sustained easing of tensions and noted that lingering uncertainty could dampen corporate spending appetite and global growth.

The Institute of Supply Management will release its own gauge for American at 10:00 AM ET (14:00 GMT). The reading is expected to drop to 51.0, still in the territory of expansion but its weakest reading since August 2016.

5. Bitcoin struggles to hold $11,000 as correction continues

Bitcoin struggled to hold above $11,000 on the Investing.com Index as a two-week rally that shot the largest digital currency by market capitalization from $7,888 to nearly $14,000 lost impetus and began a correction.

Bitcoin’s rally had been attributed to a variety of bullish factors that were interpreted to show a wider acceptance of cryptocurrencies in general.

LedgerX won regulatory approval last week for a bitcoin futures contract that will be settled in bitcoin, rather than cash, while Facebook (NASDAQ:) revealed plans for the launch of its own digital coin Libra.

A selloff of nearly 14% last Thursday continued over the weekend, with bitcoin dropping to an intraday low of $10,728.1 overnight.

was last down 6.6% to $11,080.1 by 5:29 AM ET (9:29 GMT).

-- Reuters contributed to this report.

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2019-07-01 09:56:00Z
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OPEC set to extend oil supply cut as Iran endorses pact - Fox Business

A meeting of OPEC ministers is underway in Vienna with the cartel considering a six- to nine-month extension of its current deal to cut production.

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The group is facing a weaker demand outlook due to slowing global growth.

Monday morning, U.S. crude futures were at $60.07, up 2.7 percent.

The head of Nigeria's delegation, Folasade Yemi-Esan, said Monday that her country "strongly endorsed" an extension of the deal for nine months, saying that would "offer greater certainty to the market."

The current deal reduced production by 1.2 million barrels per day starting from Jan. 1.

Tensions between the U.S. and Iran and attacks on tankers near the Strait of Hormuz have sent oil prices higher in recent days.

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Over the longer term, demand could weaken according to the International Energy Agency, which cut its demand estimate earlier this month.

The Associated Press contributed to this article.

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2019-07-01 09:48:02Z
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Iran warns 'unilateralism' between Saudi Arabia and Russia could lead to the death of OPEC - CNBC

Iranian Oil Minister Bijan Zanganeh believes "unilateralism" among some OPEC members could ultimately lead to the death of the Middle East-dominated producer group.

OPEC is set to debate an extension of oil production cuts when it meets on Monday, before getting the deal endorsed by non-members such as Russia on Tuesday.

Russian President Vladimir Putin said over the weekend that the non-OPEC leader had agreed with Saudi Arabia to extend supply cuts by at least six months. Meanwhile, Saudi Energy Minister Khalid al-Falih said Sunday that the deal would most likely be prolonged for nine months and no deeper cuts would be required.

Speaking to reporters in Vienna, Austria on Monday, Zanganeh said: "The important thing to me is that OPEC remains OPEC. It has lost its authority and it is on the verge of collapse."

"Iran is not going to leave OPEC… But I believe OPEC is going to die if these processes continue," Zanganeh said, referring to Russia-Saudi decision.

OPEC and its allies have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the U.S. — which has become the world's top producer this year ahead of Russia and Saudi Arabia.

The U.S. is not a member of OPEC, nor is it participating in the supply pact. Washington has demanded Riyadh pump more oil to compensate for lower exports from Iran after slapping fresh sanctions on Tehran over its nuclear program.

Iran's oil minister said it would have no problem with an extension of OPEC-led production cuts but warned that members of the producer group had not gathered in the Austrian capital in order to "stamp" a decision that had already been agreed.

When asked why an agreement appeared to have been reached in Osaka, Japan at the G-20 summit last week rather than in Vienna, Zanganeh replied: "This is my question too."

OPEC was not immediately available to comment when contacted by CNBC Monday morning.

Iran wants to take OPEC decisions 'back to Vienna'

Iran, which was OPEC's third-largest oil producer prior to the re-imposition of U.S. sanctions, said it would not support a long-term charter of cooperation between OPEC and outsiders that was supposed to be agreed this week.

"The Iranians want higher oil revenue, they need higher prices so they are not going to oppose an agreement. They would support it going deeper in terms of a cut but they did declare that they are opposed to this charter arrangement which would formalize the non-OPEC and OPEC agreement," Helima Croft, head of global commodities strategy at RBC told CNBC's Dan Murphy on Monday.

"It is something that the heavyweights in OPEC wanted so I would say the Gulf states, Saudi Arabia, UAE, the big non-OPEC player Russia… This is what they were looking to do but I think that is precisely why Iran is drawing the line in the sand on this."

"They have basically said they don't want OPEC decisions being made by a small number of countries outside the secretariat. They are looking to take OPEC decisions back to Vienna, back to the OPEC secretariat and have all members involved in the decision-making process," Croft said.

— Reuters contributed to this report.

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2019-07-01 09:46:58Z
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Donald Trump Resurrects Lie That China Is Paying His Tariffs - HuffPost

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2019-07-01 06:31:00Z
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Jony Ive ‘dispirited’ by Tim Cook’s lack of interest in product design: WSJ - The Verge

To many, Jony Ive’s announced departure from Apple last week felt very sudden. But a narrative is forming to suggest that he’s been slowly exiting for years as the company shifted priorities from product design to operations. The Wall Street Journal’s Tripp Mickle just published a new list of brutalities that paints a picture of discontent inside Apple, that’s responsible for “eroding the product magic” created by the union of Apple’s genius CEO and genius designer.

The WSJ report follows a similar piece published by Bloomberg last week. Both reports describe an Apple design team, led by Jony Ive, increasingly frustrated by his absence after the launch of the Apple Watch in 2015. They tell the story of a company that once put design at the forefront, progressively being led by operational concerns. Ive’s absence was “straining the cohesion central to product development,” according to the WSJ, causing several key design team members to leave Apple over the last few years.

Here are some of the highlights from The Wall Street Journal piece that’s well worth a read in full:

• Ive was “dispirited” by Tim Cook who “showed little interest in the product development process,” according to sources speaking to the WSJ. This helps explain why Cook sometimes appears to be seeing products for the first time in the hands-on area after Apple events (like the photo at the top of this article).
• Ive grew increasingly frustrated as Apple’s board was populated by directors with backgrounds unrelated to the company’s core business.
• Apple will pay Ive’s new firm LoveFrom “millions of dollars a year to continue to work Apple.”
• Ive disagreed with “some Apple leaders” on how to position the Apple Watch. Ive pushed for the Apple Watch to be sold as a fashion accessory, not as an extension of the iPhone. The product that went on sale was a compromise. Apple only sold a quarter of what the company forecasted in the first year, according to the WSJ, with “thousands” of the $17,000 gold Apple Watch Edition left unsold.
• The design team continues work on AR glasses “that would give users visual displays of messages and maps.”
• Engineers found that the doomed AirPower charging pad “behaved more like a dorm-room hot plate, heating up loose change and failing to evenly recharge devices.”

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2019-07-01 06:04:50Z
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Oil jumps over 2% as Saudi Arabia, Russia back supply cuts - Investing.com

© Reuters. Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang

By Florence Tan

SINGAPORE (Reuters) - Oil prices rose more than $1 a barrel on Monday after Saudi Arabia, Russia and Iraq backed an extension of supply cuts for another six to nine months ahead of an OPEC meeting in Vienna.

Front-month futures for September touched an intraday high of $66.44 a barrel and were up $1.57, or 2.4%, at $66.31 a barrel by 0436 GMT.

futures for August rose $1.36, or 2.3%, to $59.83 a barrel after earlier hitting a peak of $60.10, the highest in over five weeks.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies look set to extend oil supply cuts until the end of 2019 after top producers on Sunday endorsed a policy aimed at propping up the price of crude.

OPEC, Russia and other producers, an alliance known as OPEC+, meet on Monday and Tuesday to discuss supply cuts. The group has been reducing oil output since 2017 to prevent prices from sliding amid a weakening global economy and soaring U.S. output.

Russian President Vladimir Putin said on Sunday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months.

Saudi Energy Minister Khalid al-Falih said the deal would most likely be extended by nine months and no deeper reductions were needed.

"While this needs to be ratified by the remaining members of the OPEC+ group, this appears to be a fait accompli," ANZ analysts said in a note.

Stephen Innes, managing partner at Vanguard Markets in Bangkok, said oil prices could also be supported in the medium term because of geopolitical tensions in the Middle East and as China's central bank eases monetary policy to offset the impact from U.S. tariffs.

Oil prices have come under renewed pressure in recent months from rising U.S. supplies and a slowing global economy.

U.S. crude oil output in April rose to a fresh monthly record of 12.16 million bpd, the U.S. Energy Information Administration said in a monthly report on Friday.

Financial markets, meanwhile, were buoyed by a thawing of U.S.-China relations after leaders of the world's two largest economies agreed on Saturday to restart trade talks.

Still, Citi analysts saw the announcements as a temporary truce to de-escalate the trade and tariff war, and were skeptical that both sides can reach a deal soon even though 90% of the trade deal has been completed.

"The fact that both sides have not been able to get the remainder of the deal done is difficult to comprehend, suggesting either the timing is not good or some may not want a deal," they wrote in a note.

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2019-07-01 05:11:00Z
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The trade war hasn't stopped investors from buying Chinese shares, says UBS - CNBC

Overseas investors have continued to buy Chinese shares even though tensions between the U.S. and China have at times threatened market sentiment, according to the president of UBS Securities.

Stocks in Shanghai and Shenzhen rose on Monday after U.S. President Donald Trump and Chinese President Xi Jinping agreed at the G-20 summit in Japan to hold off slapping new tariffs on each other's products.

The latest climb in Chinese stocks built on the roughly 20% jump that both the Shanghai composite and Shenzhen component have seen this year — making them one of the best-performing in Asia so far in 2019. Chinese stocks were the worst-performing in the region last year when the tariff fight between the U.S. and China started.

Eugene Qian, president of UBS Securities, said on Monday that foreign investors have for the last 12 to 18 months been looking for opportunities to buy the so-called A shares — which are yuan-denominated stocks of Chinese companies listed in Shanghai and Shenzhen.

He told CNBC's Geoff Cutmore and Arjun Kharpal that an estimated $70 billion "should come into A shares by the end of the year." That's because foreign ownership of Chinese stocks is set to grow as major index providers such as MSCI add more A shares into their global indexes, Qian said at the World Economic Forum in Dalian, China.

Trade war is not over

While investors have welcomed another pause in the tariff fight between the world's top two economies, experts warned that there's still a long way to go before the two countries totally resolve their differences.

Some pointed to a similar truce that Trump and Xi reached at the G-20 meeting in Argentina last year, which ended a few months later when Washington decided to slap new tariffs on Chinese goods. The odds of Trump following the same route this time is "quite high," said Deborah Elms, executive director at consultancy Asian Trade Centre.

Elms explained on CNBC's "Squawk Box" on Monday that the U.S. is close to completing a domestic process to allow Washington to impose new tariffs on Chinese products.

"Once that's done, at any moment Trump — should he decide that he's irritated — could impose tariffs again on China. So, I think while the markets are breathing a sigh of relief, I don't think they should be resting quietly at night in their beds because this could escalate at any moment," she said.

For now, Qian said the news of a U.S.-China trade truce over the weekend was good enough for investors.

"Given the fact that the two presidents met and agreed to restart negotiations perhaps where they left in May — I think that itself is a positive," he said.

"The China-U.S. trade tensions may have some time to go. In other words, it won't be resolved overnight, certainly not in the next 30 days. But markets react, at this particular juncture, to say this is better than not to have this kind of agreement," he added.

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2019-07-01 04:23:42Z
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