Wall Street set to open flat ahead of U.S.-North Korea summit

(Reuters) – U.S. stock futures pointed to a flat open for Wall Street on Monday, as investors looked past a chaotic G7 summit over the weekend and focused on a historic U.S.-North Korea summit.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 29, 2018. REUTERS/Brendan McDermid

President Donald Trump threw the G7’s efforts to show a united front into disarray after taking aim at Canadian Prime Minister Justin Trudeau and announcing that he was backing out of the joint communique.

The markets appeared to be calm even as Trudeau spoke of retaliatory measures that Canada would take next month in response to Trump’s decision to slap tariffs on steel and aluminum imports from Canada, Mexico and the European Union.

“While everyone will have hoped for a better outcome, I don’t think anyone is surprised given Trump’s views on trade and his combative approach to the country’s allies on the issue,” Craig Erlam, senior market analyst at OANDA in London, wrote in a note.

At 8:47 a.m. ET, Dow e-minis were up 12 points, or 0.05 percent. S&P 500 e-minis were down 0.5 points, or 0.02 percent and Nasdaq 100 e-minis were down 11.5 points, or 0.16 percent.

The escalating clash over trade between Washington and some of its closest global partners cast a cloud over Trump’s efforts to make history in nuclear talks in Singapore on Tuesday with Kim Jong Un of North Korea, one of America’s bitterest foes.

Trump said the summit could “work out very nicely” as officials from both countries met to narrow differences on how to end a nuclear stand-off on the Korean peninsula.

Investors are also bracing for monetary policy changes, with three of the world’s top central banks – the U.S. Federal Reserve, the European Central Bank and the Bank of Japan – set to meet this week.

The Fed is almost certain to raise rates again on Wednesday, inching closer to a neutral policy stance, while the ECB is likely to signal on Thursday that its 2.55 trillion euro bond purchase scheme will end this year, a key move in dismantling crisis-era stimulus.

Among stocks, insurer Genworth Financial’s shares surged 28.3 percent in premarket trading after a U.S. security panel approved China Oceanwide Holdings Group’s [OWREAC.UL] purchase of the insurer.

Shares in Exxon and Chevron fell 0.4 percent and 0.2 percent, respectively, as oil prices fell nearly 1 percent on rising Russian production and the highest U.S. drilling activity in more than three years. [US/]

Envision Healthcare jumped 2.5 percent after private equity firm KKR & Co said it would take the physician services provider private in a deal valued at $5.57 billion.

Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva

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