Editors' Note: We favor no political party or politician in any country and assess political developments solely for their potential market or economic impact.
For those following all the twists and turns in UK politics over the past week, Tuesday offered welcome respite: Parliament was closed—and will be for five weeks. No more live-blogging of votes. No more midnight debates. No more Members of Parliament (MPs) shouting over each other or holding up protest signs for the cameras. No more constant checking to see if Jacob Rees-Mogg is sitting up straight. No more waking up every morning to see if anything radical happened overnight. For the next five weeks, we have stasis. But that doesn't mean investors won't have political chatter to filter through. Pundits will surely slice and dice Prime Minister (PM) Boris Johnson's ongoing Brexit negotiations. Plus, while the opposition parties shot down a general election for the second time last night, that was solely due to their preference to delay the contest until late November.[i] Because an election is a foregone conclusion, pundits are already churning out commentary alleging a victory by Labour leader Jeremy Corbyn—an avowed leftist—will be toxic for UK stocks. Don't be so sure. Stocks care about policies, not personalities, and the likelihood a Corbyn administration could accomplish all the things people fear looks exceedingly low.
Read Full Article »