D-PIMS Weekly Market Update - Week of 14th to 20th October 2019
Today’s Monday Update:
It was a week of high drama on the Brexit negotiations front, again!:
• The week kicked off with the previous week’s enthusiasm over Brexit and Trade War ‘progress’ seeming to dissipate, as a dose of realism set in. EU negativity returned with down beat assessments of negotiations and chances of an agreement in time for the deadline. Markets also realized that there was in actual fact little concrete progress in the ‘partial’ trade agreement between the US and China.
The Queen’s speech proceeded, even though there is no government majority in the house to ensure it is implemented.
• Tuesday appeared to be a day of frantic discussions between EU & UK negotiators. They were desperately trying to hammer out the ‘legal text’ for an agreement before a midnight deadline, in order to get it done in time for the EU Summit of 17th /18th October, to ratify it.
• Despite the ‘deadline’ for Brexit negotiations passing, they carried on into the early hours and then resumed at start of business Wednesday morning, continuing all day. There were intermittent ‘leaks’, either about progress or stalemates, a deal emerging in time or a delay having to be sought. The conflicting reports had the Pound reacting repeatedly, going down and up.
Thursday – On the day the EU Leaders Summit was due to start, a new Brexit deal finally emerged between the UK and EU. However the DUP said they could not support it, so even if it was approved at the Summit (which it was), it was not likely to get through the UK Parliament
• The Deal was due to be voted on in Parliament on Saturday. However, after hours of discussion about it, the House voted to delay Brexit yet again, so the vote on the ‘Deal’ never even proceeded!
Instead Boris Johnson was forced to send a letter to the EU requesting the extension, as per the Benn Act, or ”Surrender Act” as Johnson calls it. Although he sent the letter he would not sign it!
• Over the week the Pound increased in value again, as all the Brexit news was taken as positive. Overall Global Stockmarkets were generally up, although returns on overseas shares were down due to the strengthening pound. There was not much movement in the D-PIMS Portfolios.
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Past Performance is no guarantee of, or guide to future returns.
The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.