Investing.com - Here are the top five things you need to know in financial markets on Tuesday, May 14:
1. Trump promises to talk with Xi at G20, expects success
U.S. President Donald Trump said he plans to meet with his Chinese counterpart Xi Jinping at the meeting of G20 leaders on June 28 and 29. "That'll be, I think, probably a very fruitful meeting,” he said.
Trump also predicted that the outcome of trade talks would come “in about three or four weeks.”
The Chinese government also said on Tuesday that both sides would continue to talk, fueling hopes that the recent escalation in tensions could be halted.
The more optimistic tone appeared to resuscitate hopes for an eventual deal, although Trump had repeated his warning for Beijing to tone down its response. “There can be some retaliation but it can’t be very substantial,” Trump told reporters at the White House.
Beijing announced Monday that it would place tariffs on about $60 billion in U.S. imports in retaliation for American tariff increases on its products.
The U.S. Trade Representative’s office Monday released a list of about $300 billion worth of Chinese goods upon which the administration intends to levy tariffs of up to 25%, including smart phones and toys.
2. Asian stocks fall, U.S. and European equities stable
A broad selloff on Wall Street a day earlier - that caused the largest percentage drop in the Nasdaq this year and the worst performance in the Dow and S&P 500 since Jan. 3 - sent Asian shares to a three-and-a-half month low on Tuesday
They pared losses later, allowing European markets to make a modest recovery from Monday's close.
U.S. futures also turned positive following Trump's comments. Dow futures gained 140 points, or 0.6%, by 5:38 AM ET (9:38 GMT), S&P 500 futures rose 19 points, or 0.7%, while Nasdaq 100 futures advanced 68 points, or 0.9%.
The trade conflict is likely to overshadow data for import and export prices in April, due later. There will also be speeches from New York Fed President John Williams, Kansas City Fed President Esther George and San Francisco Fed President Mary Daly.
On the earnings front, Ralph Lauren (NYSE:RL) will report ahead of the opening bell, while cannabis stocks Tilray (NASDAQ:TLRY) and Aurora Cannabis (NYSE:ACB) will release quarterly numbers after the market close.
Read more: Small Canadian Tech Company Sets Sights On Next Big Cannabis Sector Phase - Brenda O'Farrell
3. Trump remarks cause price reversal across asset classes
Most asset classes have been retracing Monday's moves a little after absorbing the initial shock of the trade conflict escalation.
After hitting their lowest level in more than a decade after two straight weeks of losses, soybean futures staged a minor recovery on Tuesday. Retaliatory tariffs from China, the world’s largest importer, would likely hit the commodity, leaving U.S. farmers with high levels of unsold stock.
Demand for safe haven assets meanwhile faltered. The Japanese yen and Swiss franc retreated from recent highs against the dollar, while gold futures pulled back below $1,300, breaking a three-day winning streak.
U.S. bonds also lost their luster. The yield on the 10-year Treasury recovered from below 2.4%, its lowest since March, to trade at 2.41%.
4. Uber CEO warns of more tough times ahead for stock
Uber (NYSE:UBER) Chief Executive Dara Khosrowshahi warned that the company's newly-listed stock could remain under pressure in the coming months.
“Sentiment does not change overnight, and I expect some tough public market times over the coming months,” he admitted in a memo to staff after the company lost another 10.8% on Monday, its second day of trading. It's indicated to open up 2.4% at $38.00 a share, down 15.6% from its IPO price.
“We have all the capital we need to demonstrate a path to improved margins and profits," Khosrowshahi said.
5. Oil prices drop ahead of OPEC report, inventory data
Oil was on track for a fourth straight session of losses Tuesday ahead of the publication of OPEC’s monthly report and weekly data on U.S. crude inventories.
U.S. crude oil futures lost 13 cents, or 0.2%, to $60.90 by 5:39 AM ET (9:39 GMT), while Brent oil slipped 6 cents, or 0.1%, to $70.17.
Investing.com's senior commodity analyst Barani Krishnan expects OPEC to “make a strong case to continue with production cuts in its monthly report ...as dominant member Saudi Arabia shows it isn’t in any mood to give up the high prices it has worked hard to acquire since the winter.”
Krishnan also noted that the monthly report from the International Energy Agency (IEA) on Wednesday “might also buttress OPEC’s argument by projecting weaker demand for oil."
Soft demand amid relatively high global stockpiles would support Saudi’s arguments not to increase production. In that light, the American Petroleum Institute will report on weekly U.S. crude stockpiles later on Tuesday. For Wednesday’s official government data, consensus expects a draw of 2.13 million barrels.