Last week, several world powers convened in Vienna, Austria to revive the 2015 Iran nuclear deal. Senior officials from the governments of Iran, United States, France, United Kingdom, Germany, Russia, China, and the European Union aim to determine the next steps the United States and Iran need to take to get back into compliance. The United States has not been in direct talks with Iran but is relaying messages mainly through European members in attendance. Read More
Last week, three ships carrying ethanol from the U.S. Gulf Coast were headed to China. Reuters confirmed, from multiple sources, that this is a sign that fuel exports were increasing from the U.S. to China. These ethanol shipments may be enough to surpass the total amount of ethanol exported from the U.S. to China in 2020.
As President Trump’s term comes to an end, the administration continues to tighten restrictions on Chinese companies as the U.S. Department of Commerce blacklisted CNOOC (China National Offshore Oil Corporation) on Thursday. CNOOC was blacklisted for helping China intimidate neighbors in the South China Sea which threatened U.S. national security. The Department of Commerce stated, “CNOOC has repeatedly harassed and threatened offshore oil and gas exploration and extraction in the South China Sea, with the goal of driving up the political risk for interested foreign partners, including Vietnam.” The Commerce Secretary Wilbur Ross also said, “CNOOC acts as a bully for the People’s Liberation Army to intimidate China’s neighbors, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes”. The South China Sea has been a lasting point of contention due to the oil contained in that area.
United States and Chinese trade relations appear to have hit a new low after White House trade adviser Peter Navarro said that the trade deal was “over” on Fox News last night. Navarro later walked back his comments and said that his comments were taken out of context and, “was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world.”
With California reporting a new daily high for new COVID-19 cases, 4,515 new cases on Sunday, the continual concern for virus spread should still be at the top of everyone’s priority list. Over just the last two weeks The United States has seen a 15% case increase. Typical travel destinations in the southeast and on the west coast seem to be the most dramatically affected. The work we have all put in to “flatten the curve” may all be for naught if we, as a nation, continue to jump back to the norm too early. Hospitals are feeling the effects of the dramatic spike in cases already. The White House is making efforts to concentrate on stocking up supplies to combat a potential COVID-19 case rise this coming Fall as lower temperatures may increase the spread.
Unless you’ve been living under a rock since February 2020, you’ve probably noticed the economic impact worldwide of the novel corona-virus, Covid-19. There has been little to no positive news even as Governors ease restrictions and states/counties move from red to yellow to green phases, until the May 2020 unemployment rates were released days ago. According to the Bureau of Labor Statistics, May saw an increase of 2.5 million jobs and an unemployment rate of 13.3%, down from April’s 14.7%. This number came as a overwhelmingly positive shock as most experts had predicted it to increase to near 20%, the worst figure since the Great Depression.
As we near the end of May, we will put behind us one of the most bullish rallies for the WTI crude oil contract in history with crude jumping almost 75% this month alone. Of course, with WTI prices currently trading at $33.33/barrel, that’s not saying much, as it is widely perceived the breakeven price for domestic crude producers is $32/barrel. The question is: will this rally persist? Let’s review some components to watch out for this summer.
Federal Reserve Chair Jerome Powell provides twice-a-year updates to Congress regarding the outlook for the U.S. economic growth. Today he will be testifying before Congress and the expectations are for a positive update.
President Trump threatened to impose high tariffs on car imports from the European Union if they do not come to an agreement on a new trade deal. The new deal could amount to 25% more on cars from the European Union.
Today, stocks stalled out near record highs which remain on track to be their best year in a decade. Optimism about the global economy is still at the fore as the U.S. and China continue to improve on trade relations.