Morning Call: Pound slides ahead of UK 'Plan B' announcement
After rallying in the wake of PM May's January 15 Brexit bill defeat, GBP slid lower over the weekend ahead of today's 'Plan B' presentation to Parliament.
Head of Equity Strategy
Summary: This past year was one long roller-coaster ride for equities with the highs and the lows punctuated by a mishmash of mixed messages, misinterpreted signals and even – wait for it – what could be a gargantuan policy misstep.
As planets orbiting stars, financial markets have gone full circle from a year ago. The headlines of late 2017 and early 2018 headlines were replete with bullish noises about how great the economy had become and how animal spirits had been let loose. From early November 2017 to late January 2018 the S&P 500 gained around 11% as logic was left outside in the cold. We didn't buy the hype and our Q1 2018 Equity Outlook was coined “The most important year since 2008” and our main point was:
“For Q1 we acknowledge the strong price momentum and upbeat expectations together with what will likely become a strong earnings season reflecting past events. This is causing us to believe equities can push higher very short-term but that in the second half of Q1 macro data will begin to disappoint against expectations causing an equity correction above 7%, something we have not seen since Brexit.” (Q1 2018 Quarterly Outlook)
The word “synchronous” was the buzzword of 2018 as Quartz so eloquently put in on 31 January 2018. While S&P 500 was already down 1.7% from the peak the editors of Quartz had likely not anticipated the next event.