Trump/Kim Summit Ends Without Deal But Further Talks Likely
Risk assets began the European trading session today with a more dampened tone. The meeting between President Trump and North Korean Leader Kim Jong-Un failed to produce any results.
The summit, which took place on the neutral ground of Hanoi, Vietnam, had been keenly anticipated following the first historic meeting between the two leaders in Singapore last year.
Trump faced criticism after the first meeting for being too soft on Kim and failing to deliver any results. In light of this, there was an expectation this time that Trump would be keen to push the US agenda. After all, the aim is to achieve something concrete and to eventually secure denuclearisation.
Talks Stumble On Sanctions
However, the meeting was cut short. Speaking at a press conference after the meeting, Trump told reporters that ultimately the pair were unable to reach an agreement.
“It was about the sanctions…They wanted the sanctions lifted in their entirety, and we couldn’t do that”.
In his usual, casual manner, Trump added:
“Sometimes you have to walk and this was one of those times.”
However, the talks didn’t end on bad terms. Trump revealed that Kim outlined his willingness to dismantle the Yongbyon development and testing complex. This is something which sits at the core of the North Korean nuclear programme. However, in exchange, he wanted all US sanctions dropped, which Trump, of course, refused.
Trump Remains Optimistic
The abrupt ending to the proceeding saw the cancellation of a working lunch and a joint agreement signing ceremony. Despite this, Trump said he feels “optimistic” regarding future talks saying the meeting had put the two sides “in position to have a really good outcome.”
On Kim personally, Trump showed some level of admiration saying “he’s quite a guy and quite a character.” Indeed, as with the previous meeting, the pair seemed to share an amicable relationship. Many now hope that Trump can convert this amiability into a solid denuclearisation agreement.
Trump Under Pressure From Cohen Testimony
Delivering an agreement this time around would have been greatly welcomed by Trump’s PR team given the heat he is under at home.
The president’s former attorney Michael Cohen publically testified before Congress, accusing Trump of a number of felonies. In addition to the “hush money” to silence the former adult film actress claiming she had an affair with Trump, Cohen spoke of Trump having had advance knowledge of his campaign’s links with Russia.
Cohen also incriminated Trump for having knowledge that his long-term adviser Roger Stone was working with WikiLeaks to access leaked Democrat party emails during his election campaign in 2016.
Cohen’s testimony has now once again fueled the fires for those calling for the impeachment of the President. Given his central role in Trump’s political business as the president’s “fixer” for over a decade, this statement bears considerable weight. It also marks a turning point in the push to see Trump impeached.
Cohen accused Trump of being a “racist,” a “conman,” and a “cheat.” He ended his statement by addressing the President personally, urging him to “take responsibility for [his] own dirty deeds.”
Market Reaction & Technical Perspective
While traders have shown some disappointment with the outcome of the Trump/Kim meeting, it seems that optimism regarding the likelihood of future talks is keeping the market buoyed.
The S&P has currently stalled at a test of the 2801.65 structural level (early 2018 swing high). This also holds the 78.6% of the decline from last year’s highs just above. If we see any retracement lower from here, we could see some interim support at the 2627.98 (retest of the broken 50% retracement) ahead of deeper structural support at the 2601.74 level.