News & Analysis

Oval office feud reverses gains on Wall Street; oil prices rise

Dec 11, 2018 | Market Updates

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06:15 NZ RBNZ Governor Orr speaks
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A public spat between U.S. President Donald Trump and top Democrat leaders has sent Wall Street stocks on a roller-coaster ride.

After rising more than 300 points earlier in the session, the Dow Jones closed 53 points lower or down 0.22%, while the S&P 500 ended flat. The Nasdaq managed to hold its ground, gaining 11 points.

Early gains were attributed to improving signs of a trade deal being reached between the United States and China. It comes after a proposal was submitted to Chinese cabinet to reduce tariffs on U.S. vehicles.

That was until President Trump met with Democratic leaders Nancy Pelosi and Chuck Schumer in the oval office. The publicly-filmed meeting took a bizarre twist when Trump and Schumer started bickering over border security in Mexico and whose party won which states during the midterm elections.

“If we don’t get what we want, one way or the other. Whether it’s through you, through the military, through anything you want to call, I will shut down the government,” Trump said.

“Okay, fair enough. We disagree,” Schumer shot back.

Instead of reaching for the popcorn, traders were rattled and began selling off shares. Oil prices however starting to claw back losses with U.S. Crude rising to US$52.09 per barrel and Brent rising back above $US60 per barrel.

Despite this, Australian shares are poised to open higher. The SPI futures was up 16-points at 08:30 am AEDT. The Australian dollar remains below 72 US cents. On the data front, Westpac will today release its latest Consumer Sentiment report; an indicator of consumer spending. Then later tonight, the U.S. will release its latest monthly inflation read.

Sources: CNBC & Bloomberg

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