Home About Archives RSS Feed

@theMarket: Markets Await a Brexit Vote

By Bill SchmickiBerkshires columnist
Great Britain's House of Parliament is voting on yet another proposal to exit the European Union this weekend. While Prime Minister Boris Johnson and the President of the European Union, Jean-Claude Juncker, have a tentative agreement, there is no guarantee parliament will vote for it.
 
In this world of binary events, financial markets are looking at the vote as a black or white outcome. Parliament votes yes and the British pound, world stock markets, and the European Union (EU) celebrates. If, as they have done in the past, the British politicians vote no, then gloom and doom will likely beset the markets.
 
My own opinion is that a no vote will simply send the various parties back to the drawing board to hash out another compromise, which, in turn, will be presented to parliament for a vote. As I wrote several weeks ago, I do not believe a "hard" Brexit will on Oct. 31, occur as Boris Johnson has threatened. Either there is a resolution this weekend, or the can is kicked down the road one more time.
 
And speaking of ongoing debates, once again there seems to be a wide distance between what President Trump announced last Friday and the facts. While Trump claimed a "Phase One" deal was done, Chinese spokesmen said there is no deal forthcoming, unless the U.S. removes the tariffs Trump has levied on China.
 
In this age of disinformation, there is little trust in any news story, government announcements, presidential tweets or political speeches and press conferences. What passes for truth is largely propaganda, and depending on your political persuasion, you believe what you want to believe, regardless of the facts. Facts have become dispensable. You believe them if they conform with your opinions, you deny them as "fake news" if they don't.
 
This week, many market participants have been confounded by the continued strength of the markets in the face of the phase one trade farce. By all rights, the markets should have given back all they have gained, but they didn't. Instead, all the averages have ground higher and are now within a percentage point or two from all-time highs. The explanation is simple and summed up in two words — the Fed.
 
Traders are expecting the Fed to cut rates once again at the end of this month and possibly to indicate further interest rate cutting is in the offing. That expectation should be enough to at least support the markets. What could move stocks higher would be a robust earnings season, which has just begun. Week one of third-quarter results was not too bad.
 
The banks reported mixed results, but that was better than most analysts expected. Many investors want to see earnings results from the technology sector before making up their minds to either hold what stocks they have or just buy more. I suspect earnings will come in better than expected, but forward guidance will likely be neutral, or at least not as bad as some may have feared.
 
Between the Fed and earnings, the markets should be able to at least muddle through the rest of the month. Of course, that prognosis could fly right out the window with just one tweet from the Mad King. Hopefully, between the impeachment inquiry, the new outrage over Trump on picking his own golf club to host the G-7 meeting, and his fight to keep his taxes (two sets of books) secret, Trump won't have enough time to melt-down on China or the Fed.
 
But don't underestimate Trump's penchant to create chaos. Just look at this week's disaster on the Turkish-Syrian border. Of course, voting in a Vietnam draft dodger as our commander-in-chief was beyond me in the first place, but what do I know?
 
Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $400 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
 

 

     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Scoil Rince Bréifne Ó Ruairc Participated in North American Open Championships
Pittsfield Police Participating in US 20 Speed Enforcement Project
MassDOT Project Will Affect Traffic Near BMC
Dalton ADA Committee Explores Expanding
Milne Public Library Trustees Announce New Library Director
Clark Art Presents Free Thematic Tour on Music in Art
BCC, Mill Town Partner to Support Philanthropy Through 40 Under Forty
SVMC' Wellness Connection: March 15
Pittsfield Community Meeting On Rest of the River Project
Slavic Easter Egg Decorating At Ventfort Hall
 
 


Categories:
@theMarket (480)
Independent Investor (451)
Retired Investor (183)
Archives:
March 2024 (5)
March 2023 (4)
February 2024 (8)
January 2024 (8)
December 2023 (9)
November 2023 (5)
October 2023 (7)
September 2023 (8)
August 2023 (7)
July 2023 (7)
June 2023 (8)
May 2023 (8)
April 2023 (8)
Tags:
Debt Metals Debt Ceiling Interest Rates Markets Election Selloff Currency Pullback Bailout Recession Retirement Energy Japan Europe Commodities Congress Greece Rally Banking Fiscal Cliff Europe Euro Stock Market Oil Stimulus Employment Stocks Crisis Deficit Federal Reserve Economy Banks Jobs Taxes
Popular Entries:
The Independent Investor: Don't Fight the Fed
Independent Investor: Europe's Banking Crisis
@theMarket: Let the Good Times Roll
The Independent Investor: Japan — The Sun Is Beginning to Rise
Independent Investor: Enough Already!
@theMarket: Let Silver Be A Lesson
Independent Investor: What To Expect After a Waterfall Decline
@theMarket: One Down, One to Go
@theMarket: 707 Days
The Independent Investor: And Now For That Deficit
Recent Entries:
@theMarket: Sticky Inflation Slows Market Advance
The Retired Investor: Eating Out Not What It Used to Be
@theMarket: Markets March to New Highs (Again)
The Retired Investor: Companies Dropping Degree Requirements
@theMarket: Tech Takes Break as Other Sectors Play Catch-up
The Retired Investor: The Economics of Taylor Swift
@theMarket: Nvidia Leads Markets to Record Highs
The Retired Investor: The Chocolate Crisis, or Where Is Willie Wonka When You Need Him
The Retired Investor: Auto Insurance Premiums Keep Rising
@theMarket: Melt-up in Markets Fueled by Momentum