U.S. Decides To Close Chinese Consulate In Houston
U.S. – China tensions continued to increase as the U.S. decided to close Chinese consulate in Houston. China has already promised to introduce counter-measures. According to a Reuters report, China is evaluating the option of closing U.S. consulate in Wuhan.
The continued increase in U.S. – China tensions signals that a Phase 2 trade deal between the two biggest economies of the world will not be negotiated anytime soon.
This is a worrisome development for the world economy which tries to recover from the unprecedented crisis caused by the coronavirus pandemic.
Not suprisingly, the news put some pressure on the global markets. However, S&P 500 futures managed to deal with the pressure and are mostly flat in premarket trading.
Most likely, traders are anticipating a good second-quarter report from Tesla, which will publish its earnings today after the market close. Tesla has reached a market capitalization of almost $300 billion, and its stock price dynamics have a significant impact on market mood.
U.S. President Donald Trump Warns That Coronavirus Situation May Get Worse
The world has registered more than 15 million coronavirus cases since the beginning of the pandemic, and the World Health Organization has reported more than 200,000 daily cases for six days in a row.
Meanwhile, the U.S. President Donald Trump warned that the situation could get worse before it gets better, putting some pressure on recent market optimism.
In the U.S., Democrats and Republicans struggle to negotiate the new coronavirus aid package. The potential delay of this package may also serve as a negative catalyst for the markets.
At the same time, the current earnings season may provide support to stocks since analysts have significantly trimmed their expectations, making it easier to beat them.
Housing Data In Focus
Today, the U.S. will provide Existing Home Sales data for June. Existing Home Sales are expected to grow by as much as 24.5% on a month-over-month basis as homebuyer activity rebounded after virus-related restrictions were lifted.
The market will likely pay close attention to the speed of the rebound as the coronavirus situation got worse in July.
An encouraging Existing Home Sales report has the potential to boost stocks despite another increase in U.S. – China tensions and continued problems on the coronavirus front.
For a look at all of today’s economic events, check out our economic calendar.