May 24, 2018 / 2:30 PM / a month ago

Trump cancels summit with North Korea scheduled for next month

(Reuters) - U.S. President Donald Trump on Thursday called off his planned June 12 summit meeting with North Korean leader Kim Jong Un in a letter released by the White House.

FILE PHOTO: U.S. President Donald Trump speaks during a roundtable on immigration and the gang MS-13 at the Morrelly Homeland Security Center in Bethpage, New York, U.S., May 23, 2018. REUTERS/Kevin Lamarque/File Photo

Story:

COMMENTS:

RICK MECKLER, CHERRY LANE INVESTMENTS, A FAMILY INVESTMENT OFFICE IN NEW VERNON, NEW JERSEY:

“Really not sure why people are looking at it so negatively, except when world politics is unstable, investors’ knee-jerk reaction is to sell first and ask questions later. But I think the handwriting’s been on the wall for a while, we know that this was a troubled meeting and even if it happened, there was hardly any assurance that it was going to matter.”

“The bigger news has really been the proposed tariffs on foreign cars, the administration provides so much potential change every day, that it’s difficult for investors to see consistency to the economic future. It’s hard to invest when you’re not sure what the next step is.”

OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE INC, WASHINGTON D.C.

“There is a slightly more risk-off mood in global financial markets as a result of that announcement. Stocks took a turn lower and in terms of FX the biggest reaction so far is in dollar-yen. The dollar had already been under some pressure against the Japanese yen, but it slid to session lows.

“For now, it looks a little bit like a knee-jerk reaction. I think both parties - the U.S. and North Korea - have significant incentives to keep these talks on track. Maybe not for June, maybe not for this particular summit, but both sides probably have a lot of vested interest in not seeing these relations dissolve. That gives me some hope that we will see some degree of diplomacy continue here.

“There is also the potential that these are some sort of negotiating tactics on the part of the Trump administration that is reacting to some of the alleged comments that we had from North Korean diplomats.

“This could still be very early in the process. Obviously the news that the summit is off is certainly a blow to diplomacy, but I wouldn’t necessarily write off diplomacy at this point.”

JOHN CANAVAN, MARKET STRATEGIST, STONE & MCCARTHY RESEARCH ASSOCIATES, NEW YORK

“I don’t think this will have a lasting impact on the market. It has become clear the last few days that this meeting wasn’t going to happen. The cancellation generated a knee-jerk risk-off response. The longer term impact should be modest. It leaves the status quo in place. Trade concerns could have a greater longer term effect. The move back below 3 percent (on 10-year yield) should generate a better (bond) market sentiment.”

KEN POLCARI, DIRECTOR OF THE NYSE FLOOR DIVISION AT O’NEIL SECURITIES IN NEW YORK:

“I’m not so sure people should be so surprised, they have been pounding that drum for a couple of days trying to warn people that it potentially could happen. But it is a negative, the market once again comes under a little bit of pressure, I don’t think it falls out of bed though. It will find support at 2,710 which is the trendline support. I suspect it touches it today but every time it has touched it the last couple of times it has held. As much as I think it is more geopolitical noise, the geopolitical stuff just creates noise, it doesn’t really create long-term prices.”

MICHAEL ANTONELLI, MANAGING DIRECTOR OF INSTITUTIONAL SALES TRADING, ROBERT W. BAIRD, MILWAUKEE:

“The world is hoping for one less headwind, and Trump cancelling the North Korea meeting is bringing one more headwind back to the market. So the market is expressing its disappointment. But this is a short-term tantrum. If you look at the S&P 500, we’re in the same trading range that we’ve been in for the past six or seven days. We’d have to break below the 50-day (moving average) to feel like this is a big move. This isn’t news that meaningfully changes the market.”

MARKET REACTION:

STOCKS: U.S. stocks fell sharply and the S&P 500 was last down 0.4 percent.

BONDS: U.S. 10 year Treasury yields fell to a session low; last at 2.9678.

FOREX: The U.S. dollar index extended losses and was last down 0.4 percent.

This version of the story corrects Rick Meckler's company name to Cherry Lane Investments.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below