Navarro Walks Back Trade Comments

Overnight markets experienced much turmoil after Monday night’s comments by trade adviser Peter Navarro seemed to confirm that the trade agreement with China was over in a further manifestation of the rocky relationship between the two nations. A clarification by Mr. Navarro along with a Presidential tweet has reassured investors that the deal is still intact.

That reassurance has reversed a significant sell-off in the futures market and domestic equity markets are now looking to begin the day solidly in the green; perhaps as much as 300 points in the green for the DJIA.

Meanwhile, Treasury prices have slipped a bit and the Ten-Year’s yield has moved up a few basis points to around 0.72%. Crude oil is up slightly to around $41.30 while the price of gold has risen by about $7 to $1,762. A little later this morning, Markit Services is expected to report that its Manufacturing PMI has improved to 50 from 39.8 this month as its PMI for the Services sector may show a gain to 48 from 37.5. These are diffusion indices where values greater than 50 suggest growth while levels below that signal contraction. Also, New Home Sales for May will be reported at 9:00 CDT and may show a small increase over April’s activity. The Richmond Fed is also expected to report that its Manufacturing Index improved in June to minus 2 from minus 27.