President Donald Trump is not happy with the deal John Kerry and the Obama administration made with Iran. Iran promised to stop their nuclear program if the West would lift the sanctions that hurt Iran’s domestic economy. Mr. Trump wants to renege on the deal, and if that happens, a series of events will occur. And most of those events won’t have a positive impact on the U.S. economy. The first event will be Iran’s exit as a world oil supplier. That opens the door for higher oil prices. Oil prices are already up by 13 percent in 2018, and if Trump decides to pull the plug on the Iranian deal that percentage will increase faster than a speeding bullet.
The price of crude hit $75 a barrel recently, and some economists believe that price represents a U.S. exit from the Iranian deal. But other experts say there’s no telling how much oil prices will soar once Trump’s decision is public information. But according to a recent Reuters article, Trump may decide to only partially withdraw from the deal.
Global thematic strategist, Frances Hudson believes the increase in oil prices and the rise in the dollar’s value at the same time are an unusual event. That may indicate investors around the world think there’s going to be a stronger demand for crude oil in the coming months. The dollar is enjoying a recent price surge against several world currencies, and that might mean the U.S. economy is performing better than expected.
Warren Buffett’s additional investment in Apple gave the stock market something to cheer about. And the global tech index closed at a six-week high recently. And that spike helped Asian markets gain as well. But stock prices in Europe are not reacting the same way. Europe’s tech index was down. Italian shares slipped by more than one percent, and equity futures are predicting a weak opening on Wall Street.
Trade talks between China and the U.S. are ongoing. The second meeting to discuss tariffs is in the works. The outcome of that meeting will also impact what happens in the financial market going forward. If tariffs become a reality, the status quo will take a turn in the wrong direction, according to some economists. It seems President Trump’s agenda is not helping investors or consumers. And his tax cut is not giving taxpayers the relief they expected right now. The benefit consumers expect from that tax cut won’t materialize until consumers file their 2018 tax returns in 2019.