All three major equity indexes closed slightly higher on Monday with the United States-North Korea summit only hours way in Singapore. At the same time, the markets placed on the back burner this past weekend’s factious meeting of the Group of Seven nations.
Trump announced the United States’ withdrawal from the G7’s joint communique following a series of bellicose tweets aimed at Prime Minister Justin Trudeau after the Canadian leader announced retaliatory tariffs on goods imported from its ally to the south.
The markets seemed to take the trade row in stride and looked instead to the impending summit between Trump and North Korean leader Kim Jong Un, a historic effort to bridge differences and avoid nuclear confrontation on the Korean peninsula.
Investors are also anticipating this week’s meetings of three of the world’s top central banks: the Fed, the ECB and the Bank of Japan.
The Fed is widely expected to raise key interest rates on Wednesday, and on Thursday the ECB is seen moving toward a roll back of its crisis-era stimulus scheme.
Treasury yields rose as the Treasury Department saw solid demand at auctions for $54 billion in new three and 10-year notes ahead of the Fed meeting.
Of the 11 major sectors of the S&P 500, four closed in negative territory, including real estate, utilities, technology and financials.
Sempra Energy was the biggest percentage gainer of the S&P 500, ending the day up 15.5 percent on the news that activist investors urged a strategic review and recommended new directors for the company’s board.
Boston Scientific helped out the healthcare sector as its shares advanced 7.4 percent following a Wall Street Journal report that rival Stryker had made overtures to acquire the medical device maker.
AT&T closed 1.0 percent higher, a day ahead of a court decision regarding its proposed merger with Time Warner.
Facebook gained 1.3 percent after on group of analysts said Instagram could be the company’s primary growth driver.
UnitedHealth climbed 1.2 percent, providing the largest boost to the Dow.
Approximately 6.05 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.62 billion share average over the past 20 trading days.
Oil Prices End Flat
Global benchmark Brent crude was unchanged to settle at $76.46 a barrel. U.S. West Texas Intermediate crude rose 36 cents to settle at $66.07, its highest level since the first of June.
U.S. crude’s relative gains were the result of profit-taking on the wide spread between the two benchmarks. In addition, crude had some support from gains in the equities market, although prices were also weighing uncertainty on OPEC supply hikes.
The number of new rigs drilling for oil in the United States rose by one last week to 862, its highest since March 2015, according to data from Baker Hughes. That suggests U.S. crude output, already at a record 10.8 million barrels per day (bpd), will climb further.
Russian news agency Interfax said on Saturday that Russia’s oil output had risen to 11.1 million bpd in early June, up from slightly less than 11 million bpd for most of May and above its target output of under 11 million bpd.
For 18 months, OPEC and its allies have curbed production in the hopes of stabilizing markets and supporting prices. The group is set to meet June 22-23 in Vienna and decide how to move forward with its supply curb policy against the backdrop of tumbling Venezuelan output and looming sanctions against Iran, the third-largest OPEC producer.
Venezuelan production is falling because of sanctions, economic crisis and mismanagement, while Iran faces U.S. sanctions over its nuclear program that are likely to curb exports in the next few months.
OPEC, together with some non-OPEC producers including Russia, started withholding output in 2017 to try to end a global supply glut and support prices. OPEC and its partners are due to meet June 22-23 in Vienna.
Iraq’s oil minister said on Monday that producers should not be influenced by pressure to pump more oil, stating that oil prices still require support and stability, and producers “should not over-exaggerate” the oil market’s need for more supplies.
“This could be misinterpreted by speculators and consumers, leading to a significant fall in oil prices,” he said.