D-PIMS Weekly Market Update - Week of 2nd to 8th September 2019
Today’s Monday update:
The last week has seen a lot of news reporting over Brexit, but unfortunately for all the sensational headlines, we seem no closer to an answer to an actual solution:
• On Tuesday Parliament returned with a bang after the ‘summer recess’. Even before the much anticipated ‘show down’ the Government lost their working majority when Phillip Lee ‘defected’ to the Liberal Democrats. After that, Parliament unsurprisingly voted to take control of Wednesdays proceedings to facilitate a vote on delaying Brexit and outlawing a no deal. In the event 21 Tory MPs voted against the Government and all face expulsion from the party. This prompted the PM to start pushing for a General Election. The Pound rose on the day.
• Wednesday saw Hong Kong’s Leader (Carrie Lam) announce that she will withdraw the controversial Extradition Bill, which sparked the many months of protests and chaos in Hong Kong. Markets rose on this news and on the formation of a coalition Government in Italy between 5 Star and the Democratic Party after many months of Political turmoil and uncertainty. The Scottish court case rules that the impending Parliament suspension extension, is lawful. This case had been brought to try an prevent any attempt at a ‘no deal’ Brexit.
However, this development seemed to made pointless later on Wednesday, as Parliament approved an opposition bill to delay Brexit and block no deal, with the help of 21 Tory rebels who faced expulsion from their party for doing so. The opposition also blocked the Government’s General Election Bill, despite repeatedly calling for one all year!
• Thursday – Government decides not to try and delay the Brexit delay bill in the Lords in the realization that it was likely to get approved in the end anyway. China’s Vice Premier (Liu He) announced that China and the US had agreed to hold high-level trade talks in early October in Washington. These would follow on from the mid-September talks between the trade teams.
There was another vote for a General Election called for the next Monday (9.9.19), but with opposition leaders saying they would again vote against it, it was unclear whether it would go ahead. With no Government Majority and no date for General Election it become clear that the UK effectively has no elected Government and little could happen until matters get resolved, one way or another.
• However, apart for the Pound which significantly strengthens over all Brexit news, other Markets seemed to ignore it all. Global Stockmarkets were generally up over the week and Bond markets were down. The D-PIMS Portfolios were generally up, especially the higher risk ones.
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The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.