Tag Archives: Brexit
Equity Markets React to the U.K. Election
At the General Election on Thursday, U.K. voters handed a resounding victory to Boris Johnson’s Conservative party. The British electorate awarded the party with 365 out of 650 seats, the largest outright majority of any U.K. government since 2001, and the biggest victory for the Conservative party since Margaret Thatcher’s final victory in 1987. Exhibit…
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Gearing up for auto tariffs? Revenue exposure might be useful
May was categorized by the return of macro fears. Many equities indices and fixed income indicators flashed red – and the S&P 500’s four month win streak ended – as investors grappled with trade tensions and the potential impact on global growth. Adding to investors’ uncertainty, President Trump’s surprise month-end announcement of tariffs on Mexican…
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Communication Services Is Getting Louder
Since the sector shakeup on Sep. 24, 2018, the S&P 500 fell 19.5% through the close of Dec. 24, 2018 then rebounded 12.2% by the close of Jan. 23, 2019 for a loss of 9.6% in the full period. The annualized volatility of 22.8% in the past 82 days has been the highest since the 82…
- Categories Equities, S&P 500 & DJIA
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Brexit: Sell on May and Run Away?
29 months after the referendum that triggered Britain’s departure from the E.U., and a little over four months from the scheduled departure date, the nature of the ultimate exit deal (if any) remains uncertain. What can indices tell us about the market’s reaction and expectations? The volatility of the pound sterling has offered a direct link to the uncertainty…
Sizing Up U.S. Equities In Managing Brexit Risk
One of the main recent headlines has been the strength of the UK pound from the proposed Brexit transition. This brings into question how investors in the UK and Europe may possibly position themselves in the U.S. equity market. Notice in the past five days, the USD to GBP started from a high of 1.305…
- Categories Equities, S&P 500 & DJIA
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Knowing Your Geographic Revenue Exposure: Lessons From Brexit
The so-called “Brexit” referendum result in the UK on June 23, 2016, came as a shock to financial markets, with the S&P United Kingdom LargeMidCap (GBP) falling by over 3% the following day. As the political and economic outlook became uncertain, the British pound sterling had steep declines against other major currencies including the U.S….
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The Source of Uncertainty
In 2017 politics, not economics will be the major source of market uncertainty. The world’s major economies moved past the financial crisis and Great Recession: unemployment rates are at more acceptable levels and central banks are discussing the end of quantitative easing. Equity markets in the US and the UK made new all-time highs while…
- Categories Blitzer's Insights, Commodities, Equities, Fixed Income, Strategy
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Remarkably Unremarkable
In geopolitical terms 2016 was a tumultuous year. From the outcome of the Brexit referendum to the surprising conclusion of the U.S. presidential election, 2016 was a year of political surprises. The markets, braced or not, reacted differently in each case. We saw heightened correlation in the aftermath of Brexit and observed higher dispersion immediately…
- Categories Equities, Uncategorized
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Performance Trends in the U.K. Gilt and Corporate Bond Markets
On Aug. 4, 2016, the Bank of England cut its benchmark rate by 25 bps to a low of 0.25%. This move, coupled with its announcement of a GBP 70 billion expansion of quantitative easing, with GBP 10 billion committed for the purchase of investment-grade corporate bonds, is furthering the positive performance of these asset…
- Categories Fixed Income
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Calm After the Storm
The dispersion-correlation map helps us to understand the dynamics of market volatility better. Last month we observed high levels of correlation in markets across the globe following the unexpected results of the Brexit referendum. High correlation levels can be a reflection of market fragility. However, as current dispersion and correlation levels indicate, the heightened readings…
- Categories Equities, S&P 500 & DJIA
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