So there’s more drama surrounding British politics and the saga that is Brexit. The PM, Boris Johnson has decided to suspend Parliament, thereby calling for the Queen’s speech. This is a common practice for a new PM and is a highly ceremonial process, which of course is comprised of a speech by the Queen. However, what makes this time slightly different is the fact that this suspension will be longer and comes during a time when the 31 October Brexit deadline is drawing near. This means that there will be fewer days available for members of Parliament, MPs, to debate Brexit. They have had three years and there is still no deal that has been agreed by the British government and the Parliament. What do these politicians think they can actually achieve with another few weeks of discussions? Of course the actions taken by the PM have further divided an already polarized Parliament and country and it can be expected that protesters will take to the streets and there may even be a vote of no confidence of the PM. The people voiced their opinion back in June of 2016, it is now time for the British government to make good on that referendum – deal or no deal.
Italian PM Giuseppe Conte resigned today as tensions between the coalition government came to a boil. The coalition of the far-left Five Star Movement and the far-right Lega Part is no more. Lega Party leader, Matteo Salvini, is seeking to become the country’s next PM. His rise to power over the last couple of years has been consistent with the growth is nationalist and populist movements the world over. Emboldened by recent EU Parliament elections, Salvini has the PM post in his cross-hairs. It is not certain that he will win, but should he, this will cause many more headaches for the top brass within the EU. As the Brexit saga continues to unfold, will the EU next have to deal with an Italeave? If they do, this is all but the kiss of death for the “European Experiment.” In other news, global markets continue their whip-saw movements, yet still find themselves range-bound. This consolidation will not be long-lived and they will break-out either strongly to the upside or to the downside. So be sure to stay diversified, stay vigilant, and stay with The Kapital News. #Italeave #Brexit #EU #WakeUpAmerica #Economics #Politics #Peace
With the major US indices posting their worst week of 2019 and other financial markets around the world suffering declines of -1%, -2%, and 3% for the day, let alone the week – the question remains, are global markets shocked? Did the global markets truly believe that a 25 bps cut from the Federal Reserve was going to be enough to conjure up the animal spirits of traders and investors alike? Or was it the “shock” that President Trump ended the trade truce and is calling on additional tariffs to be placed on Chinese goods effective September 1st? A combination of both perhaps, but nevertheless, the markets have priced in the action by the Fed and has been doing so for months. The trade story of how a deal was imminent, strung along global markets for months, only to find that no deal was made and now there is even further escalation – and the Chinese are vowing to retaliate. With the absence of the Federal Reserve and the Congress during the month of August – what will markets cling to as they hope for some sort of rescue? Hope is not a strategy and if they must now pay attention to the underlying economic and financial data, then perhaps this week’s sell-off may be the beginning of more to come. If so, we will not be shocked. Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Economy #Recession
We discuss the EU election results. While we were anticipating a larger cohort of Eurosceptics and populists being sent to the EU parliament, there still was nevertheless an increase of populist candidate victories. This will undoubtedly change the dynamics of European politics, yet many questions still remain.
UK PM Theresa May tendered her resignation today, yet she will remain on until the end of July until her replacement is determined. It has been an uphill battle for Mrs. May since the very start for her, but she was nevertheless unable to get a deal through to provide for Brexit. What happens next is anyone’s guess and don’t forget we are also in the midst of the EU elections. Additionally, despite President Trump claiming that he does not want war with Iran, he has decided to send at least 1,500 troops to the Middle East. Recall there is also an air craft carrier strike force in the area as well. There was also an emergency declared by the President so that he could bypass Congress in order to expedite the sale of arms and ammunition to US “allies,” in the Middle East. There are words and then there are actions, let us hope and pray that there is no war.
We are now in the midst of the EU elections, which started today with the UK and the Netherlands, however, we will not know the results from all EU member states until Sunday evening. We are anticipating a rise in populism across the EU, thus sending many Euroskeptics to the EU parliament. If this occurs, then we can imagine that the EU may very well begin to disintegrate, as individual countries want to re-take their sovereignty. Even if it’s not a disintegration, if populists make sizeable gains to EU parliament, we can expect several structural changes. We also discuss the do nothing government in the US – what if anything will be accomplished domestically prior to the 2020 Presidential election?
So we have a new deal, same as the old deal, as far as Brexit is concerned. PM Theresa May was out today providing new details to her deal to finally leave the EU. Of course this has to go to a vote before Parliament – for the 4th time mind you. This deal is basically the same, with a few “carrots” provided to appease some members of Parliament to finally pass the deal – will it pass is anyone’s guess. We also look at the underemployment rate regarding recent college grads and how this is likely to take center stage during the 2020 campaign. We have the President on one side, claiming that this is the best economy in US history, and on the other side, we have people who live in the real world, who are sacked with debt, are underemployed, and see a different economic picture. It will be interesting to see how this all unfolds and we discuss some scenarios.
We have a lot of events taking place this week along with economic headline news. Of course we have the EU elections, we had the Aussie and Indian elections, the Brexit chaos continues, a further escalation in the US/China trade war, Ford is cutting 7,000 jobs globally, and a Fed index is showing a slowing in US growth, and more. Lots to discuss, so let’s get to it!
We were on a roller-coaster of a ride this week with tweets and statements from The White House as well as comments from the Chinese. All of this taken together has whipsawed markets to the upside and to the downside. Given recent remarks, it appears that the US/China trade negotiations are at a standstill and may remain so until and unless President Trump and President Xi meet during the G20 meeting next month in Japan. Therefore, we may very likely see a continuation in volatility until there is further clarity surrounding the trade war. Nevertheless, be on the lookout for more tweets!
It’s been on the back burner, but not out of mind, and yes, we’re talking about Brexit. The PM’s deal is set to be voted on for a 4th time and so we’ll see in a few of weeks if the 4th time is the charm for Theresa May. Given the US/China trade war, there is a large and powerful political lobby that is caught in the crossfire – farmers. The President has stated repeatedly that the US will continue to subsidize farmers. Given the politics of the situation, is the President attempting to “buy” votes from those key swing states that he needs to maintain his office? Lastly, we discuss the sabre rattling regarding Iran and more broadly the effects of war and how we need a new level of consciousness here in the 21st century to end all wars.
