Weekly Overview (16 – 20 July 2018): Trump faces US Justice Department investigation after openly siding with Putin

Shadow-like person standing in front of Trump Tower

Last Monday, US president Donald Trump and Russian president Vladimir Putin held a meeting in Helsinki, Finland. The meeting went great as far as Trump’s personal interests were concerned. For the people of the United States, it was a disaster.

Trump’s latest meeting in Helsinki, as well as his plans to impose 10% tariffs on an additional $200 billion in Chinese imports brought chaos to what was an already tumultuous market. This time around, the president’s actions were so poorly thought out that he managed to lose the trust and respect of his own people almost overnight.

Trump came under fire after responding with “I don’t see any reason why Russia would have done so” to the question whether Russia interfered in the 2016 presidential elections to help him win against Hillary Clinton. Not only that, but he also stated he had no reasons to doubt the Russian leader, citing Putin’s “extremely strong and powerful” denial.

The US Justice Department is now investigating Trump for openly siding with the leader of a competing nation, and for advancing his personal agenda as opposed to national interests. After the meeting was over, many Americans denounced their leader and called him a traitor, including former CIA director John Brennan, who described Trump’s words as “nothing short of treasonous”.

In a time of grave uncertainty and heightened geopolitical tensions, Americans were still glad to learn that the weekly jobless claims in the US dropped by 8,000 last week to a seasonally adjusted 207,000. This marked the lowest level of unemployment since 1969.

Weekly mortgage applications, however, declined by a seasonally adjusted 2.5% as US buyers searched high and low for affordable homes. In other words, that’s 12% less applications than those filed in the same week for 2017. According to the report, the price of housing inventory continues to be twice as higher than the rate of income growth.

The latest Consumer Prices Index report from the UK revealed that the 12-month inflation rate remained the same (2.3%) for June 2018 compared to the previous month. The rate was anchored due to the rising prices for motor fuels and domestic gas and electricity, which were offset by falling prices for clothing, games, toys, and hobbies.

In the retail sales department, the country reported a 2.1% increase in sales in the three months leading to June. This marked the biggest increase since February 2015. Out of all businesses, food stores enjoyed the highest growth of 2.2%, stating that the good weather and the World Cup celebrations significantly helped boost sales. Online sales, on the other hand, remained unchanged at 18.0%.

One look at Canada’s performance for last week revealed that their CPI (2.5%) is outperforming that of the UK by 0.2%. This set its own record of being the largest year-over-year increase in Canada’s CPI since February 2012. Of all products, prices for gasoline and food purchased from restaurants were hiked the most, which were offset by lower inflation for electricity and telephone services.

New Zealand’s inflation rates were reported at 0.4% on a quarterly and 1.5% on an annual basis. The country’s CPI also increased by 1.5% for the period June 2017 – June 2018. The biggest price surge came from the housing market: housing and household utilities increased by 3.1%, rentals by 2.5%, and construction costs by 3.9%.

China released its Q2 GDP growth report on Monday, revealing an increase of 6.7% compared to a year ago despite the ongoing trade war. However, many outside experts warn that any financial reports coming from the world’s second largest economy are most likely biased.

General Electric reported an adjusted second quarter profit 19 cents per share, which outperformed estimates by 2 cents. Revenue also rose above expectations, particularly due to the successful growth of their aviation and healthcare businesses.

For the latest quarter, Microsoft earned an adjusted $1.13 EPS, also exceeding expectations by 5 cents. Their accelerated growth in cloud-computing software also amounted in a better than expected revenue.

Stanley Black & Decker reported an EPS of $2.57 per share for its latest quarter, significantly beating expectations of $2.02. Revenue also outperformed forecast after the company stated it successfully dealt with the negative impact of higher commodity costs and less than favourable currency fluctuations.

American Express reported a slightly lower revenue than expected. Its earnings per share for the second quarter were calculated at $1.84 EPS.

Blackstone reported 90 cents per share, invalidating consensus estimate of 75 cents EPS. Revenue also increased by 55% compared to 2017, exceeding expectations.

After touching a 12-month high, the US dollar moved sharply lower after Trump voiced his concerns about the Greenback’s strength on the market. The dollar slid against the Yen and touched 1-week lows.

The Euro, after trading at intraday lows at 1.1576, managed to climb its way up through 1.16 and advanced 100 points. The pound lost almost 2.5% against the USD, but managed to escape its narrow trading range against the Euro.

Gold traded at 1229.16 on Friday, significantly underperforming compared to the performance of 1241.26 from the previous Friday. Silver declined to 15.461 on Friday compared to 15.767 the previous Friday. Copper was bearish, hitting a 1-year low last week, with September futures trading at $2.6735 per pound.

On Friday, NASDAQ closed at 7,350.23, S&P closed at 2,801.83, and Dow Jones finished at 25,058.12.

Bitcoin rose by nearly 16% on Monday, with analysts predicting it could easily break through $8,000 in the near future. Past that point the cryptocurrency will face significant resistance levels. One of the key factors behind Bitcoin’s revival may be BlackRock’s statement that it is looking into ways to incorporate blockchain technology into its asset management services.

Make sure to visit our detailed trading news report to catch up on all important financial events from last week.