Most Southeast Asian stocks closed flat on Friday in a lackluster trade before the mega event on the weekend. All traders and Investors have their eye on the meeting of President Donald Trump and Xi Jinping at the G20 summit in Japan. Traders and investors did not make fresh positions as they wanted to watch the outcome of the Saturday meeting between the president of the two superpowers.
It was the first trading day of the July contract which ended flat for the Indian indices. Similarly, most other southeast Asian country stocks remind cooled of in lights of the developments. The outcome of the Saturday meeting between the two presidents is going to be the steer the market next week.
The Saturday meeting at The G20 summit is going to be the most important take off for the global market. President Donald Trump and XI Xinping are expected to talk about the ongoing trade war and what can be the possible solution. Before leaving for the G20 summit, President Donald Trump had also tweeted that he is going to talk about the trade deal with China and if the outcome is not favorable he is going to put an additional tariff on Chinese goods.
If everything goes well, we can expect a trade deal between the United States and China. This will give a huge positive Tigger for the global market and all the market will see a gap up opening on Monday. However, if the meeting fails and a possible trade deal is not made, the markets are going to slump. This is because of the rising fear of recession in the global economy.
The trade war has had a huge impact on the global economy and the industrial output and GDP numbers are quite evident in the fact. The GDP of China has fallen into its lowest level in the last 10 years. Similarly, the GDP of India has fallen in below 6 for the first time in the last 10 years in Q1 FY20. The MCSI indicator is also showing a big problem coming forward for the global economy.
Most analysts are of the opinion that President Donald Trump is going to make a trade deal with China because of the general elections in 2020. They also believe that the trade war will not pull to such an extent that the financial markets will start reacting because it would be a danger signal for or the upcoming elections.
Trump has been quite serious about unfair trade practices made by different countries and he is cracking down on them like never before. Hence, all we can do is wait for the Saturday meeting and hope for a positive outcome. Hence, the direction of the market next week will be guided by the outcome of the meeting at The G20 summit.