“The core problem, however, is the need to fit markets into a style of trading rather than finding ways to trade that fit with market behavior.” – Brett Steenbarger

1. U.S., Canada Set for High-Stakes Trade Talks Under Cloud of White House Threat — Canadian Foreign Minister Chrystia Freeland traveled to Washington to continue trade negotiations. “We’ll give them a chance to have a separate deal, or we could put it into this,” President Trump declared, adding that the “simplest deal is more or less already made. White House Economic Adviser Larry Kudlow told CNBC “We may have to resort to auto tariffs if the U.S. and Canada can’t reach a fair deal,”.
2. Apple to Take iPhone X Design to New Phones — Apple plans to unveil three new phones using the edge-to-edge screen design of the iPhone X, sources told Bloomberg. The new “S year” devices, expected to be unveiled at Apple’s product event in September, will include updated features and cover a broader range of prices, colors and sizes. One will even include a 6.5-inch display, the largest Apple (NASDAQ:AAPL) has ever included on an iPhone.
3. U.S. to Pay Farmers $4.7 Billion to Offset Trade-Conflict Losses — the Trump administration pledged to pay farmers $4.7 billion to offset losses from trade disputes with foreign buyers of U.S. agricultural products. The payments would help protect farmers from “unjustified tariffs” some nations have applied in response to President Trump’s trade policies. China, Mexico, the European Union and other trade partners have levied tariffs on U.S. farm goods from soybeans to pork to apples, leaving growers vulnerable during a downturn in the agricultural economy. Soybean farmers are in line to get roughly three-fourths of the direct payments, or $3.6 billion, followed by producers of pork, cotton, sorghum, dairy and wheat.
4. India Set for Record Oil Demand Growth — India is set to overtake China as the biggest source of growth for oil demand by 2024, according to a forecast by Wood Mackenzie. The country’s expanding middle class will be a key factor, as well as its growing need for mobility. On the other hand, China – which overtook the U.S. as the biggest importer of crude oil in 2017 – is set to see a decline due to two trends: Alternative energy sources and a more efficient freight system.
5. Fresh Stress for Emerging Market Currencies — Argentina’s peso tanked 7.5% against the dollar late last week, bringing losses to nearly 50% over the past year, after President Macri asked the IMF to speed up delivery of a $50B bailout package. In response to the suffering peso, other fragile emerging market currencies sold off sharply overnight, with Turkey’s lira and the South African rand feeling heat, and India’s rupee slumping to a new record low. The tumult highlights a heavy international dependence on the dollar. Some 48% of the world’s $30T in cross-border loans are priced in the U.S. currency, up from 40% a decade ago.
6. Moody’s Lowers Rating on Ford — Moody’s has lowered Ford’s (NYSE:F) credit rating to one notch above junk bond status, and warned of further downgrades if it doesn’t make “clear progress” on its $11B turnaround plan. The second-largest U.S. auto manufacturer is faces weakening profit margins in North America, a retrenching business in China, and losses in South America and Europe.

The week ahead — Economic data from Econoday.com: