During election night in 1968 between Nixon and Humphrey, I was so fascinated by the role of demographics in elections that I stayed up all night, watching the returns. The next day, I felt so lousy that I swore to never do that again.
Last night, I stayed up all night watching the Brexit election returns in the U.K., because I could see the reaction ricocheting around the globe. First, the pound dropped like a ten-pound rock, driving up the relative strength of the dollar. Then, Asia currencies went . . . well . . . wacky, if that's a technical enough term. Asian stock markets opened up strongly, following the U.S. lead, but turned around dramatically when the first election results started to come in. Oddly, the U.S. futures market turned down before the European futures did, which I will study further.
Regardless, both the U.S. and European stock markets will take a beating today. As promised, they will overreact. There may be minimal structural change in the English economy for the next two years, while they negotiate a painful withdrawal from the European Union. Hopefully, the period of ambiguity will be as brief as possible, as the stock market hates uncertainty. If anything, English businesses may be more inclined to deal with U.S. businesses during the interim, because our trade rules with England are not changing.
I do like the stock market at this "over-reacted" level!
Okay, I confess . . . I watched the election returns all night from the couch with my eyes closed part of the time . . .
Last night, I stayed up all night watching the Brexit election returns in the U.K., because I could see the reaction ricocheting around the globe. First, the pound dropped like a ten-pound rock, driving up the relative strength of the dollar. Then, Asia currencies went . . . well . . . wacky, if that's a technical enough term. Asian stock markets opened up strongly, following the U.S. lead, but turned around dramatically when the first election results started to come in. Oddly, the U.S. futures market turned down before the European futures did, which I will study further.
Regardless, both the U.S. and European stock markets will take a beating today. As promised, they will overreact. There may be minimal structural change in the English economy for the next two years, while they negotiate a painful withdrawal from the European Union. Hopefully, the period of ambiguity will be as brief as possible, as the stock market hates uncertainty. If anything, English businesses may be more inclined to deal with U.S. businesses during the interim, because our trade rules with England are not changing.
I do like the stock market at this "over-reacted" level!
Okay, I confess . . . I watched the election returns all night from the couch with my eyes closed part of the time . . .
