Displaying items by tag: brexit

(New York)

Wall Street analysts area all over the map about where stocks are headed next year. Some firms are bearish (Morgan Stanley), some are neutral, and some are bullish. Put Bank of America in the latter category, as the bank says that stocks are set to surge in the first couple months of 2020. Calling the year “front-loaded”, Bank of America analysts say that the S&P 500 should rise by 5.2% by March 3rd. Michael Hartnett from BAML says that the combination of easing trade worries, diminished Brexit fears, and loose monetary policy should combine to cause a “melt-up” in risk assets.

FINSUM: We like this call. All the fears for the winter seemed to have ebbed, and there will be a few months before election worries really kick in.

(London)

After three and a half years of chaos, it is finally going to happen—the British people are going to get a chance to vote on Brexit. No, it will not be in the form of a second referendum, but rather in the form of a general election. After fighting the option for months, the Labour party has been forced to give in to a general election that will pit Boris Johnson against Jeremy Corbyn, and likely decide the future of Brexit. No date has yet been set for the election, but it looks very likely to be in early December.

FINSUM: The trick of this election is that Brexit is probably going to happen no matter who wins because even top Labour leaders actually want the UK to leave.

(Brussels)

In what can only be described as an act of both extreme patience—and hope for a better outcome—the EU has yet again agreed to extend the Brexit deadline from October 31st to January 31st following the big failure of Boris Johnson’s most recent deal in Parliament. The difference with this extension is that it has a caveat that if the EU and UK come to an agreement before January 31st, then the UK is free to leave in advance of the deadline.

FINSUM: The EU obviously wants the UK to leave on the best terms possible, and they are probably hoping Brexit gets completely reversed through an upcoming general election.

(London)

Well we are about three and a half years post-Brexit, and for most of that time, the situation only seemed to be getting worse. The UK was not only squabbling with the EU, but in the in-fighting in the UK was fevered. However, this week Boris Johnson has almost inexplicably agreed in principle to a deal with the EU. The big step from here is getting it approved by Parliaments on both sides.

FINSUM: All the details of this plan are not apparent yet, but that is frankly beside the point for a US investor. What matters here is that if the UK and EU can agree a deal, then markets will stop fretting about risk on that front.

(Berlin)

The future of the EU is an open question, and one that seems to be growing bleaker once again. Much of the cultural mood that preceded Brexit is now taking hold in Germany. German media is angry at the ECB about robbing its savers of income with very low or negative interest rates. News outlets refer to the “expropriation” of German assets (a term with huge historical resonance). Altogether, the German people are angry about their wealth funding the rest of an EU they see as squandering it.

FINSUM: Germany has benefitted disproportionately from the Euro as it keeps their currency artificially weak. Yet it is also true that hard working Germans have been subsidizing the irresponsible finances of southern Europeans for years. It seems a way off, but Germany could be the next EU domino.