The calm before the storm……?
So that’s the question that markets face today: will tomorrow’s Brexit Debate in the UK Parliament be a damp squib defined as inconclusive or Parliament deciding to apply for an extension to the 29 March Brexit date? That perversely given that fact alone solves none of the Parliamentary disagreement, it will be taken positively. The outcome outliers are: Parliament backing TM’s deal which would even more perversely be seen as a much bigger positive or, heading for the door with No Deal which would be taken as a massive negative for GBP and the UK. Acres more newsprint will be devoted to the various amendments and the probable/putative outcomes to tomorrow night but those are the principal themes.
While we plough through all those articles, spare a thought for the market that affects everyone whether they are homeowners or tenants. London property is the bellwether for the UK stock and currency markets and represents a key indicator for prosperity and most importantly confidence. In 2018 turnover in the London property market fell 14% from 2017 and is now at its lowest level since 2008 which was of course the year of the Crash. Enter from his Chicago base Kenneth Griffin super successful hedge fund supremo who in the past weeks has embarked on a major property acquisition spree in NYC, Chicago and now London where last week he snapped up a £95million house in Carlton Gardens W1. For those who are interested in such stats-e.g. the UK Chancellor of the Exchequer(!)- this will involve HMRC collecting £11,313,750 in Stamp Duty on the Carlton Gardens property. If this sounds mad, I would not bet against Mr Griffin and it is a sure thing that top end property agents will be thanking their various Gods for this news and hoping for a knock on effect in the wider market.
So there we have it: is the UK poised to plunge into an economic abyss or, once the Brexit dust has settled does this represent one of the great opportunities for UK plc and all of its markets? GBP is lower than on Friday night but is holding up well this morning, the FTSE is a little lower and WTI and Brent Crude Oil are both off 2%.
Discussion and Analysis by Humphrey Percy, Chairman and Founder