Brexit and Financial Markets

Raoul

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Use this thread to discuss Brexit impact on financial markets.

Looks like we are in for another turbulent day on Monday.

Just looked at the Forex charts and the pound is already down from 1.36 to 1.34

Wall St futures are also down about 100 points in the first few minutes. Going to be another rocky day!
 
George Osborne is going to be making a statement before the EU markets open to calm fears.

I suspect the silence over the last 3 days will see a lot more selling though.
 
redshaw said:
George Osborne is going to be making a statement before the EU markets open to calm fears.

I suspect the silence over the last 3 days will see a lot more selling though.
Click to expand...

Yeah saw that. Not sure if that will calm things down or make it worse, as the problem is with the markets of many countries, not just the FTSE.
 
IG saying Ftse down another 180pts on Monday. Oh joy...add another five years to my retirement date (will probably be dead by then).
 
Jippy said:
IG saying Ftse down another 180pts on Monday. Oh joy...add another five years to my retirement date (will probably be dead by then).
Click to expand...

The down days will probably continue for a bit while the market rebalances itself and digests/prices in the ramifications of Brexit. A lot of people have egg on their faces after pricing in a remain result and are now scampering to derisk their portfolios, which will keep volatility high for a protracted period.
 
Goldman is now forecasting a mild UK recession in early 2017 due to Brexit.

http://www.cnbc.com/2016/06/26/gold...-2017-downgrades-global-growth-forecasts.html


The U.K. is likely to enter a "mild recession" by early 2017, following its vote leave the European Union (EU), Goldman Sachs economists wrote in a report released Sunday.


The bank's economists also downgraded its global growth forecast by0.1 percentage point to 3.1 percent in 2016.

U.K. gross domestic product (GDP) would take a 2.75 percentage-point hit in the next 18 months from the cumulative effects of "increased uncertainty and deteriorating terms of trade," Goldman Sachs' Jan Hatzius, Jari Stehn and Karen Reichgott wrote.

Goldman's forecast for GDP growth in the U.K. this year was 1.5 percent, a 0.5 percentage-point drop from its previous forecast, while the bank's prediction for U.K. growth next year is 0.2 percent, a 1.8 percent decline from its previous forecast.

The economists listed three "economic transmission mechanisms" from the shock Brexit vote.

"First, the UK terms of trade are likely to deteriorate, especially if it becomes harder to export high-value added services (including financial services) to the European Union," the note said.

"Second, the uncertainty about the long term is likely to weigh on UK growth in the short term as firms hold off on investment...Third, outside the UK the main transmission channels are weaker UK demand for imports and—much more importantly—a tightening of financial conditions via a stronger exchange rate and lower risk asset prices."
 
I couldn't believe the buying on the FTSE 250 and 100 1-2 days before the referendum. Of course there was confidence but the buying kept going and going. I was like, where were you 4 days ago, 5 days ago on that Polling Thursday and saying to myself are you not aware that these stocks are overbought and now higher than anytime in the last 3-6 months.
 
redshaw said:
I couldn't believe the buying on the FTSE 250 and 100 1-2 days before the referendum. Of course there was confidence but the buying kept going and going. I was like, where were you 4 days ago, 5 days ago on that Polling Thursday and saying to myself are you not aware that these stocks are overbought and now higher than anytime in the last 3-6 months.
Click to expand...

Happened in many markets all over the world - people seemed sure remain would win and that would propel us to new highs. Just shows the herd behavior that dominates a majority of trading psychology these days. Meanwhile the likes of George Soros took positions months ago, predicting something like this would happen and made a lot of money on Friday.
 
Jippy said:
My ITV and Barclays shares were both down 20pc:(
Click to expand...
ITV was ripe for an American takeover anyway - the share price drop and weak pound has just made it even more attractive to US buyers. The share price might jump if Discovery or Liberty or whoever table an offer.
 
Pound with a classic middle-finger pattern this morning...

pound.jpg
 
I don't want gloat by for a guy with a company who buys quite a lot from England, I've saved 1 SEK in every pound since brexit and it just looks like getting better and better.

Good for me in the short term, but economically for the UK, just a stupid stupid decision.
 
Regulus Arcturus Black said:
I don't want gloat by for a guy with a company who buys quite a lot from England, I've saved 1 SEK in every pound since brexit and it just looks like getting better and better.

Good for me in the short term, but economically for the UK, just a stupid stupid decision.
Click to expand...

Oddly my pension fund increased in value on Friday despite the poor showing in the markets. Not sure why but it does behave weirdly at times - often decreases in value when the markets have performed strongly!
 
M18CTID said:
Oddly my pension fund increased in value on Friday despite the poor showing in the markets. Not sure why but it does behave weirdly at times - often decreases in value when the markets have performed strongly!
Click to expand...

probably because the fund managers are speculating on the pound decreasing and making a profit, I would guess.
 
Interval said:
Doubt it. Majority pension fund investments tend to be debt securities which have increased in value as I have linked above.
Click to expand...

Important to note that not all debt-securities would make money in such a day. Corporate bonds, or bonds issued from peripheral EU countries or even developing nations would have probably not made money on Friday, as they're more equity-like in performance. In 'black swan' days like Friday, correlations will go to 1 for most assets, even debt & equity, which is why modern portfolio theory in itself is flawed when it comes to diversification.

Different story for GILTs, Bunds or US Treasuries though which are more cash investments rather than debt. You're probably exposed to those in your pension.
 
McLovin said:
Important to note that not all debt-securities would make money in such a day. Corporate bonds, or bonds issued from peripheral EU countries or even developing nations would have probably not made money on Friday, as they're more equity-like in performance. In 'black swan' days like Friday, correlations will go to 1 for most assets, even debt & equity, which is why modern portfolio theory in itself is flawed when it comes to diversification.

Different story for GILTs, Bunds or US Treasuries though which are more cash investments rather than debt. You're probably exposed to those in your pension.
Click to expand...
I realised the error as soon as I posed that. I meant exposed to sovereign and AAA debt.

Such a fecked up time to have a career in finance.
 
Boris Johnson: markets and the pound are ‘stable’ - FT

Are they?


Boris Johnson, seen as one of the main contenders to replace David Cameron as UK prime minister, has suggested the worst of the markets turmoil is behind Britain, claiming “people’s pensions are safe, the pound is stable, markets are stable”.

Sterling hit a new low for the day after his remarks.


Speaking outside his house in north London on Monday, Mr Johnson praised UK chancellor George Osborne for his efforts this morning to try and reassure markets in a speech before the open of equities trading in London. Mr Johnson said on Sky News:

I think it is very good news that the chancellor has come out and said some reassuring things to the markets

It is clear now that project fear is over, there is not going to be an emergency Budget, people’s pensions are safe, the pound is stable, markets are stable, I think that is all very good news.

-----------------------------------------------------------------------------------------------------------------

What a lunatic. :lol:

Sterling is now down 2.6%
RBS down 14.5%
Barclays down 11.5%
Lloyds down 9.3%
 
redshaw said:
I couldn't believe the buying on the FTSE 250 and 100 1-2 days before the referendum. Of course there was confidence but the buying kept going and going. I was like, where were you 4 days ago, 5 days ago on that Polling Thursday and saying to myself are you not aware that these stocks are overbought and now higher than anytime in the last 3-6 months.
Click to expand...

Maybe on some individual stocks, but the FTSE 100 and 250 were both just as high earlier in the year. There was a big dip as leave caught up in the polls a couple of weeks back, then a recovery as the markets bet on remain winning, but only back to their pre-dip levels.
 
McLovin said:
Boris Johnson: markets and the pound are ‘stable’ - FT

Are they?


Boris Johnson, seen as one of the main contenders to replace David Cameron as UK prime minister, has suggested the worst of the markets turmoil is behind Britain, claiming “people’s pensions are safe, the pound is stable, markets are stable”.

Sterling hit a new low for the day after his remarks.


Speaking outside his house in north London on Monday, Mr Johnson praised UK chancellor George Osborne for his efforts this morning to try and reassure markets in a speech before the open of equities trading in London. Mr Johnson said on Sky News:

I think it is very good news that the chancellor has come out and said some reassuring things to the markets

It is clear now that project fear is over, there is not going to be an emergency Budget, people’s pensions are safe, the pound is stable, markets are stable, I think that is all very good news.

-----------------------------------------------------------------------------------------------------------------

What a lunatic. :lol:

Sterling is now down 2.6%
RBS down 14.5%
Barclays down 11.5%
Lloyds down 9.3%
Click to expand...


How can he just stand in front of a camera and just bullshit us like that. :lol:
 
McLovin said:
Boris Johnson: markets and the pound are ‘stable’ - FT

Are they?

Sterling is now down 2.6%
RBS down 14.5%
Barclays down 11.5%
Lloyds down 9.3%
Click to expand...
Unfortunately, thats the quote for the day and all the Leave voters won't even bother looking into it.
 
FTSE 250 has took another beating but it's not that bad yet.
JSTb.jpg


LSTb.jpg


Big point moves are a given with it being so high. Depending on the news I can see it getting more stable and bouncing back. Usually weak hands get exchanged for strong hands as some see bargain prices.

Biggest worry is how the weak the banks were before and hard they've been hit.
 
redshaw said:
FTSE 250 has took another beating but it's not that bad yet.

Big point moves are a given with it being so high. Depending on the news I can see it getting more stable and bouncing back. Usually weak hands get exchanged for strong hands as some see bargain prices.

Biggest worry is how the weak the banks were before and hard they've been hit.
Click to expand...

The problem with looking at charts over 3 years or 10 years is you might start to think it's okay for it to drop that low.

If Brexit has wiped out 3 years of gains, that is not a good thing

It hasn't. Yet.
 
McLovin said:
Boris Johnson: markets and the pound are ‘stable’ - FT

Are they?


Boris Johnson, seen as one of the main contenders to replace David Cameron as UK prime minister, has suggested the worst of the markets turmoil is behind Britain, claiming “people’s pensions are safe, the pound is stable, markets are stable”.

Sterling hit a new low for the day after his remarks.


Speaking outside his house in north London on Monday, Mr Johnson praised UK chancellor George Osborne for his efforts this morning to try and reassure markets in a speech before the open of equities trading in London. Mr Johnson said on Sky News:

I think it is very good news that the chancellor has come out and said some reassuring things to the markets

It is clear now that project fear is over, there is not going to be an emergency Budget, people’s pensions are safe, the pound is stable, markets are stable, I think that is all very good news.

-----------------------------------------------------------------------------------------------------------------

What a lunatic. :lol:

Sterling is now down 2.6%
RBS down 14.5%
Barclays down 11.5%
Lloyds down 9.3%
Click to expand...

Don't bother the leaver camp with trivial things like expert's opinions and facts
 
"Cutting off the nose to spite the face"

The saying sums up what the Brixiteers have caused perfectly.
 
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