US GDP Beats Expectations; Markets Move Lower on Fears of Renewed Trade Tensions & Tech Sector Regulations
Published March 28, 2018
US GDP data showed growth rates of 2.9 percent last quarter versus expectations of 2.7 percent; increases in household spending on services was the largest contributor to this uptick in US growth.
Global stocks moved lower again yesterday as speculation over increased regulation in the tech sector worried investors. Facebook and other tech companies led the losses as the market erased most of Tuesday’s gains.
Trade war fears returned after China’s state-run newspaper ‘Global Times’ reported that China will drum up a list of further retaliatory tariffs on US exports to China. Risk sentiment has dampened as investors now expect the US to also publish a list of Chinese products that could be targeted for tariffs after the US hardened their stance on alleged IP theft and unfair trade practices by the Chinese.
China has reported that North Korean Leader Kim Jong Un has pledged denuclearization for his country ahead of talks with US President Donald Trump; the news comes after Kim’s surprise visit to Beijing which aimed to restore relations with their sole ally.
Oil prices are lower this morning ahead of today’s data release on US oil stockpiles from the US Energy Information Administration. Private industry on US oil supplies showed that inventories rose by 5.3 million barrels last week.
Despite this, oil prices are still expected to record month on month gains as a result of geopolitical developments from OPEC and Russia. Saudi Crown Prince Mohammad bin Salman has noted that his nation and Russia are in talks to formulate 10 to 20-year agreements on output production.
Unrest in Venezuela has also propped up oil prices; the South American country’s oil production has dropped significantly over the past three months due to protests among workers at state-owned oil and gas companies.