Three Things To Look At During This Week G20 Meeting – Introduction
This week, the biggest focus among investors will be the G20 meeting, which will be held in Buenos Aires, Argentina. The meeting of the 20 biggest economies will be very important because of the ongoing global issues. Three things will be critical when the leaders meet.
This has been a challenging year for global trade. It all started when the US imposed tariffs on washing machines. These tariffs were followed closely by the tariffs on steel and aluminum. They were then followed by the tit-for-tat tariffs between the United States and China. Tariffs on European cars were put on hold after a meeting between the US president and EU’s Jean-Claude Juncker. On a positive side, a deal between Canada, US, and Mexico was made. This was an important deal because it avoided the risk of NAFTA being torn apart.
As all this happened, the United States was patience and ready to go the long route. This is because its stock market – which the president follows closely – had continued to do well. In October however, things started to change. The US stock market continued to fall. This decline has continued in November, with the indices being in the red for the year.
The decline started during the earnings season. In the season, many American companies announced positive results. However, many companies lowered their guidance for the fourth quarter. Most of them based their argument on the lowered guidance on the ongoing trade conflict. Therefore, with the US president under pressure to perform, and with the Chinese leader under pressure with his own country, there is a likelihood of a truce.
Saudi Arabia is a member of NATO. This meeting comes as the country is under international pressure after the murder of journalist, Jamal Khashoggi. A report by the CIA has said that the country’s crown prince, Mohammed Bin Salman ordered the killing. This is likely because it was executed in the country’s embassy in Turkey. Donald Trump has said that he won’t impose sanctions on the country. This is because doing so will lead to higher oil prices. In addition, ending weapons purchase from the kingdom will be a boom for China and Russia, where it will buy the weapons. There is a likelihood that the murder of the journalist will be a topic.
Donald Trump has taken it personally to lobby OPEC against supply cuts. This is because he believes that higher oil prices will lead to higher oil prices, which will affect the economy. This is probably the reason why he has gone easy on Saudi Arabia. In addition to the US-Saudi dynamics, investors will focus on Saudi-Russia issues. In recent weeks, Saudi Arabia has supported supply cuts. Russia has taken opposite side and advised against cuts. This is important because Saudi is the biggest crude supplier in OPEC while Russia has formed a coalition with Saudi. Therefore, disagreements between Saudi and Russia will mean a challenging time ahead of the OPEC meeting on December 6.