Many market specialists are clued on how the Brexit details will probably look. Although it looks easy and one can say if it works it works, and if it’s not working then the administration will quickly make it better.
Now if we do get a positive presentation from Theresa May and most U.K. legislators like it, then Parliament passes it and it ends years of anxiety and indecision and Sterling rises.
If it’s a bad decision, or it seems like we’ll drop out of the EU without a settlement, then diplomacies will once again move quickly to restore the situation. Parliament won’t vote for it, May could get forced out and we get a new leader or we continue with a general election. Certainly, there might be a hard period for the GBP but all of this eventually increases the possibilities of a different Brexit referendum.
Dow falls more than 100 points
On Monday the S&P 500 and Dow Jones Industrial Average ended weaker while shares of large bank institutions dropped broadly. Concerns of a deluge of corporate earnings announcements beginning this week and growing geopolitical anxieties also discouraged investor risk appetite.
The S&P 500 pulled back 0.4 percent to 2,755.88 as the financial sector dropped 2.1 percent.
The 30-stock Dow dropped 126.90 points to 25,317.40, driven by declines in Goldman Sachs. The Nasdaq Composite, though, increased 0.3% and ended at 7,468.35 while Apple and Amazon increased 0.6% and 1.3%, each. Monday too recorded the 4th continuous day of declines for the S&P 500.
Gold gains on softer Asian shares
On Tuesday U.S. gold futures rose 0.2% to $1,226.3 an ounce while Spot gold went up 0.2% at $1,223.60 an ounce. ANZ analyst Daniel Hynes said “Geopolitical tensions are escalating and that has brought some safe-haven buying back into the gold market… Short positions also appear to be unwinding as a result.”
Today Gold prices went higher while Asian stocks hesitated and pressed down by political forces between Saudi Arabia and Western governments, doubts around Brexit and Italy’s budgetary woes. According to Jordan Eliseo, chief economist at gold trader ABC Bullion. “Fears over a slowdown in global growth may also support the metal, especially if markets get a sense that the U.S. Federal Reserve may slow their pace of tightening, with the potential for substantially more short-covering in the weeks ahead.”
Asian stocks decline due to increasing global tensions
On Tuesday Asian markets dropped over the board while investors continued to be careful due to increasing global tensions.
The China markets remained in a negative area after witnessing strong profits over the last two days. Hong Kong’s Hang Seng index dropped about 2.0% while Shenzhen composite declined by 1.228 % and the Shanghai Composite dropped 1.36%. Strategists at DBS Group Research said “Yesterday’s 4.1% rally in the Shanghai Composite Index is likely to have been a dead cat bounce,” in a morning note. “Any stimulus by China should be viewed not as a boost but as a cushion against a slowing economy against external headwinds.”