What’s next for Brexit?

After the dramatic defeat of the UK Prime Minister’s EU withdrawal plan, we see five scenarios for the future EU-UK relationship.

Arnab DasTime to read: 6 min

Yesterday, Parliament rejected UK Prime Minister Theresa May’s Brexit Withdrawal Bill by a 230-vote margin — the largest defeat of legislation in nearly 250 years, when Parliamentary records began.1 That the defeat exceeded consensus by as much as 100 votes reflects the depth and breadth of dissatisfaction with May’s Brexit plan. Many Members of Parliament (MPs) fear it could further undermine the economy, contribute to secession in Northern Ireland or Scotland, or might not confer the freedom for which Brexiters campaigned in the referendum.


Investor sentiment stays positive despite geopolitical drama

Weekly Market Compass: Investors seem to be tuning out everything except trade wars and Fed tightening

Time to read: 5 min

There has been no shortage of drama across the macroeconomic and geopolitical landscape so far in 2019. However, it appears that investors may be tuning out much of the political theater around them. Which storylines are moving markets now, and which may become more integral to the plot in the weeks ahead?


A modern-day War of the Roses: Is a real winner possible in the US-China trade war?

Weekly Market Compass: In an era of globalization, trade wars mean losses for all sides

Time to read: 6 min

Students of history may recall the War of the Roses, which was waged more than 500 years ago. It was an epic battle between two rival branches of the English royal family that both had claims to England’s throne — the House of Lancaster, represented by a red rose, and the House of York, represented by a white rose. While the House of Lancaster ultimately won the War of the Roses, by some measures there was no real winner. The war lasted for many years and resulted in very significant damage to both houses. In fact, by the end of the war, the male lines in both houses had been eliminated.


No holiday in sight for global disruption

Weekly Market Compass: A long list of challenges will follow markets into the new year

Time to read: 5 min

At the start of 2018, I warned about two significant forms of disruption that posed risks to markets: geopolitical disruption and monetary policy disruption. The solution to the global financial crisis — experimental monetary policy — had created greater wealth inequality, which had led to geopolitical disruption, and the situation was poised to worsen in 2018. This experimental monetary policy, especially large-scale asset purchases, was beginning to be unwound — and that was an experiment in and of itself which also had the potential to cause disruption.


Putting the sell-off in perspective

Despite the recent bad news, I am more positive today than I was earlier in the year

Time to read: 5 min

Last week saw major swoons in the stock market and US Treasuries. As of this writing, the sell-off has been continuing. However, I still hold out hope that we could see stocks finish higher than where they are now by year end. Yes, Virginia, there still is the possibility of a “Santa Pause.”

Examining the causes of the sell-off

Investors seem to largely be reacting to concerns about the possible escalation of trade wars between the US and China. First came the realization that the Donald Trump-Xi Jinping trade talks at the G-20 meeting did not achieve the results that had initially been reported. Then, later in the week, the arrest of Huawei’s chief financial officer by Canadian authorities at the behest of the US caused a significant amplification of concerns that the US-China trade relationship would deteriorate.


Stock losses snowball across the globe in a December sell-off

We expect continued volatility as markets overreact to positive and negative news

US stocks began a dramatic sell-off on Tuesday that has continued and spread to other parts of the world, creating intense headlines across the globe on Thursday. There has been a flight to the perceived safety of sovereign debt. The yield on the 10-year US Treasury fell dramatically, from more than 3% at the start of the week to 2.83% as of this writing1 — and other major sovereign debt yields also followed suit. Some areas of the yield curve inverted, and the 2-year/10-year yield curve is in danger of inverting.