North Korean Sanctions Imposed, Infrastructure Spending Down
August 08, 2017
Following additional missile testing, the UN Security Council voted unanimously to impose more sanctions on North Korea. The U.S. oil rig count fell by one and infrastructure spending also decreased.
- North Korea fires back after UN sanctions. The United Nations Security Council unanimously imposed sanctions on North Korea Saturday, which could amount to a billion dollars, a third of the rogue state’s revenue. The move was in response to North Korea’s increasing frequency of intercontinental ballistic missile tests. President Donald Trump and his equivalent in South Korea, Moon Jae-in, agreed to apply maximum pressure to try and force the North to resume talks in a Monday phone call. The North, typically, responded by denouncing the sanctions, claiming the missiles are a legitimate means of self-defense against potential U.S. aggression, and that it was ready to teach the U.S. a “severe lesson” if they attacked. China has agreed to enforce sanctions, crucial as it is North Korea’s biggest trading partner. [Reuters]
Economic Indicators & News
- Rig count falls, OPEC meeting looms. After the number of active rigs in the U.S. fell by 1 this past week, crude prices rallied. They slid, however, as the market looked to the OPEC producer meeting, and the cartel’s highest year-to-date production this past July. Despite the May agreement of OPEC nations to reduce outputs by 1.8 million barrels per day, July’s high production indicates these cuts may not materialize. Economists and investors will be watching the growing conflict in Venezuela, the instability of which may impact oil production. [Market Watch, CNBC]
- Post-election Infrastructure Rally crumbles. While a large infrastructure program was a big plank of the Trump campaign platform, a lack of specific plans, and the administration’s difficulty persuading lawmakers to support other elements of its agenda, has led investors to question the feasibility of this policy priority. While construction industry stocks soared in the wake of Trump’s election, that rally has since crumbled. Lacking fundamentals, non-residential construction spending is experiencing its most severe decline in years, further bringing these stocks back to earth. [WSJ]