Monthly Archives: November 2019

Quick Market Review – November 2019

October seems to have been a month of mixed messages. After four interest rate rises in 2018, the US Federal Reserve announced an interest rate cut to 1.50% (the third cut this year) citing a slowdown in the US economy, and concerns over trade wars and a global recession.

However, markets have generally been positive last month with risk assets generally outperforming perceived safe havens. The S&P 500 posted another all time high last month, and emerging market equities posted a return of 4.20% during October. Much of this was due to market confidence that trade war concerns were receding with the announcement of a Phase One trade deal between the US and China.

Political uncertainty in the UK has reduced as well with the prospect of a non deal Brexit now looking unlikely, and sterling has rallied against the dollar and euro, but as 70% of revenue from FTSE 100 companies is earned overseas, the improvement in the value of sterling has coincided with a fall in the FTSE 100 last month.

Boris Johnson finally got his wish of another General Election, and the prospect in 2020 of maybe a stable government and perhaps an orderly Brexit would go a long way to establish market confidence after years of political turmoil.

The New Normal

Well it looks like it’s happening then. Boris Johnson has finally gotten his way and the UK will be heading to the polls for the third time in five years in what could prove to be a vain attempt to break the current political deadlock around Brexit (and almost everything else) and deliver a majority government capable of advancing a legislative agenda.

It seems this will push the Brexit date back to at least 31st January 2020. Although in theory it is possible for the UK to leave the EU before this date if the UK ratified the Brexit deal, the chances of this happening seem very slim.

Parliament will be suspended for election campaigning next week and it seems as if new MPs will be sworn in on 16th December, before parliament breaks for Christmas on the 19th December (I do sometimes wonder when parliament actually does any work!).

As such, for the moment, I would consider 31st January the new de-facto Brexit date, unless…

Unless many things really.

  1. Unless we end up with another hung parliament unable to pass the Brexit deal ahead of the deadline
  2. Unless we vote in a remain leaning government (or coalition of remain leaning parties) and we end up with another referendum.
  3. Unless we vote in a majority Lib Dem government (never say never in politics anymore) who revoke article 50.

and many many more potential permutations that are beyond me at the moment.

As such, it would seem that the current spell of uncertainty will run on for some months yet. And this really is my point. Can we really call it a ‘period of uncertainty’ anymore?

We have been doing this now for well over 3 years – it could be over 5 or 6 years before we are fully removed from the EU (if we even leave at all) and beyond that, it seems a 2nd run of the Scottish independence referendum is gathering pace as well.

As such, I have come to accept that so called ‘periods of uncertainty’ are becoming the norm. In our increasingly fractured and politically divided times, these periods are actually not really periods at all – they are just life.

This has strengthened my resolve, now more than ever, to keep calm and carry on and to advise clients to do the same. We must not use these media proclaimed ‘periods of uncertainty’ as an excuse not to take action on matters which are important to us. Otherwise we would never get anything done.

I think the time has come for individuals, businesses and, dare I say it, governments to accept that we live in volatile times and this is likely to remain the case. As such, let’s just get on with the job at hand. We do after all, live in normal times. The new normal.