This week, uncertainty was the only certainty as the High Court ruled that Parliament should vote on Brexit, UK and U.S. stock markets struggled to find their footing and the U.S. presidential race tightened due to renewed investigations regarding Hillary Clinton’s email server.
Fasten your seatbelt, folks. Despite the UK’s vote to leave the European Union (EU) back in June, the High Court has ruled that the government does not have power to trigger Article 50 without parliamentary approval. This has injected further anxiety into already twitchy markets ahead of the U.S. presidential elections next week.
For those who campaigned to remain in the EU, the ruling brings renewed hope that Brexit may be thwarted. But it also casts considerable doubt over how events will unfold. Theresa May’s government had previously promised that “Brexit means Brexit,” and to trigger Article 50 by the end of March 2017. That now looks less likely, especially as an appeal has been lodged to the Supreme Court. Ironically, should the Supreme Court be unable to resolve the matter, the dispute could end up being settled at the European Court of Justice.
In market news, the FTSE 100 is on track for its worst week since early January. It’s a similar story in the U.S., where equity and bond markets are under intense pressure ahead of the presidential elections. If the S&P 500 falls again today, it will be the longest losing streak since 1980.
Facebook flatters but shares fall
The social media giant saw its net income triple over the third quarter. Results were better than expected, beating analyst expectations on revenue and earnings. Yet despite the good news, Facebook’s share price fell by a substantial 8% in after-hours trading. The group warned that ad limits for users’ newsfeeds would hit revenue growth “meaningfully” in 2017.
Hawkish or cautious?
The Bank of England (BoE) isn’t sure which direction to move next. And neither are the markets. The UK economy has performed surprisingly well since the Brexit vote. Household spending has been robust, with consumers shrugging off Brexit-related concerns. Inflation is on the rise, however, with the BoE forecasting that its 2% target will be surpassed as early as spring next year, and the central bank doesn’t expect the figure to fall back in line until 2020. Given the collapse in sterling, the Bank might be wary of raising rates too quickly, as consumer confidence could take a hit when higher prices for imported goods feed through to consumers.
The final showdown: Trump or Clinton
For those who thought the U.S. presidential race had gone a bit stale recently, think again; the polls continue to tighten ahead of next week’s historic decision. Hillary Clinton had appeared ready to lock up her bid for the White House, but news that the FBI had reopened its investigation into her use of a private server for confidential emails has thrown a wrench in the works.
Source: Bloomberg (Real Clear Politics average polls), November 3 2016.
Donald Trump, meanwhile, continues to defy expectations. The Republican mogul is fighting hard with a last ditch attempt to win some key states including North Carolina, a crucial battleground for the two candidates. It’s a close call, but the bookies still have Clinton as favorite to become the 45th president of the United States.
And finally …
Two Australian pranksters managed to bluff their way into a prestigious 18-hole international golf tournament in North Korea. Initially on a polo trip in Beijing, the pair heard about the tournament in a local bar and decided to pose as world-class professional golfers. Ditching the jodhpurs for some authentic looking green blazers bearing the Aussie national logo, the two were chaperoned throughout the five-day trip, staying in swanky hotels and posing for various photos. Suspicions arose soon after the first ball was hit, however. The caddies were less than impressed, but the Supreme Leader Kim Jong Un will be relieved that his father’s supposed world-record 38 under par didn’t come under any threat on his home turf.