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April 28, 2018

Weekly Market Outlook

By Keith Schneider


© Korea Summit Press Pool/AFP

Equity markets rebounded off recent lows this week after photos of the historic meeting between South Korean President Moon Jae-in and North Korea dictator Kim Jun-un (AKA “little rocket man”) were released.

President Trump is rightfully taking credit for the unfolding thaw. His tactics have diverged from his predecessors as he has not been playing hard to get. Trump intends to follow-up with a date with Kim next month to secure a nuclear free North Korea.

A more sinister view is that Kim is playing the West by buying time while he finds another location to test his nuclear toys, as his current test sites are so overused that they are geographically unstable.

What is unquestionable is that geopolitical tensions have been significantly reduced for the moment and that might explain a bounce in equities and weakness in Gold and risk off assets.

A few key take-aways:

Soft commodities and especially grains might be coming out of a multi decade depression.

Foreign equities are taking leadership with established markets acting well.

The US yield curve is flattening and yields on medium term bonds are above 3%.

What that all means, and more are covered in detail in this week’s Market Outlook Videos.

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