“IT LOOKS GOOD! IT FEELS GOOD! – BUT IT IS TIME TO PULL TOGETHER!”
Father Christmas gave me three very special Yuletide presents at this General Election result; clarity, confidence and hopefully a tsunami wave of investment into business and infrastructure opportunities from private equity, sovereign wealth funds, hedge fund and fund management. There could be billions of Pounds ready to pour into so many innovative ideas. Also expect M&A activity and corporate finance to raise its game before too long. We have been in the economic doldrums for over three years and despite subversive activity in the House of Commons the UK’s performance has been remarkable – almost keeping up with the EU in terms of performance, though nothing to write home about.
With a majority of 80, it looks as though the PM will be able to deliver Act One of the BREXIT WITHDRAWAL, but a trade deal may take longer to deliver than the end of 2020. It is likely that the EU will want BREXIT to fail, so I expect Barnier and his troops, under EU political guidance, to give the UK a hard time, but PM Johnson now has time on his side; so unlike under PM May, it won’t be one way traffic. The fact that President Trump has tweeted that there is a possibility of a great trade deal between US and UK before too long, I won’t be holding my breath. However, it does help having your closest ally on board – and NO! the NHS is not for sale! The last time a quick deal was pulled off with the US on trade “was before the Old King Died!” Nonetheless the rumour that the US may agree ‘phase one trade deal’ with China is encouraging for World GDP and could provide some momentum. It is even not preposterous to imagine that the current bull market may continue in 2020.
At 9.50am this morning the FTSE 100 stood at 7,385.92 +112.45 (+1.55%). In hindsight the main winners now seem quite obvious, now that the cumuli nimbus clouds of uncertainty over public ownership have now vaporised. United Utilities was up all but 7% and Severn Trent +6%. Banks were on fire as the fear of BREXIT dissipates with business likely to become bore confident. Lloyds Banking and RBS were up 10% and 11% respectively with Barclays up 7.5%. Housebuilders were on the charge with Persimmon up 11% and Barratt Development up 9%. We need to keep our feet on the ground, but certainly clarity and confidence seem more evident. Cable rose at 10.01pm last night from $1.3150 to $1.3550 at 7.00am and has now settled at $1.3414.
I wish everyone on both sides of the political divide a great weekend. It is time to pull together as nation and bury our differences and contempt.