ÌýPresident Donald Trump's cancelation of the North Korea Summit made headlines last week.
The unexpected development negatively affected global markets with the potential to cause an increase in geopolitical risks.
While stocks were trying to shake off initial losses, subsequent statements from the White House raised uncertainty over the summit.
Twenty-four hours after canceling the meeting in a letter to North Korean leader Kim Jong-Un, Trump told reporters that he and Kim might still meet in Singapore on June 12.
“We’re talking to them now. They very much want to do it. We’d like to do it. We’ll see what happens,� Trump said.
- National security investigation into imported cars
Trump’s instruction to investigate importing vehicles and auto parts was another important development last week.
The White House announced that at a meeting between Commerce Secretary Wilbur Ross and Trump, Ross was asked him to consider an investigation into possible tariffs on imported vehicles and auto parts and to ascertain if they threaten the U.S.� national security.
The Trump administration last used the national security chapter of the Trade Expansion Act of 1962 - Section 232 � to apply a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.
Ìý- Fed minutes point to June rate hike
The minutes of the Federal Reserve also important for the markets.
“Most participants judged that if incoming information broadly confirmed their current economic outlook, it would likely soon be appropriate for the Committee to take another step in removing policy accommodation�, minutes of the Fed’s May 1-2 meeting, which were released Wednesday, said.
According to the minutes, some officials argued: “inflation running modestly above 2 percent would be consistent with the Committee’s symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations at a level consistent with that objective.�
The relatively unconcerned stances of Fed officials on rising inflation lowered expectations of a fourth rate hike this year.
Federal Open Market Committee (FOMC) members penciled in three rate increases this year in March, according to newly released quarterly economic projections, but those who favored three and those who envisaged four hikes were evenly divided.
- Most data show disappointing results
Most of the data released last week were relatively negative and failed to meet market expectations. Most notably, indicators coming from the housing sector signaled that a lack of supply continues to negatively affect sales. Official data showed new home sales decreased by 1.5 percent and existing home sales decreased by 2.5 percent in April, marking their first declines in recent months.
The University of Michigan Consumer Confidence Index (UMICH) declined to 98 in May, the lowest level in the last four months. The market expectation for consumer confidence was to remain at 98.8, at its April level.
Orders for durable goods fell 1.7 percent month-on-month in April, recording the first drop in the last three months.
One of the few positive data for the week came from the manufacturing sector with PMI reaching 56.6 in May, recording the highest level in the last 44 months.
- New week: GDP, inflation employment data
The new week in the U.S. will start calm with the observance of Memorial Day on Monday when most public and private institutions along with markets will be closed.
This week’s most important agenda items known so far will be data releases.
The GDP for the first quarter is to be released in the middle of the week, PCE price index will be announced on Thursday, and the May employment report will be published on Friday.
The markets will closely follow all of the above to shed light on the current state of the U.S. economy.Ìý