As divisive as the referendum itself was, the outlook for where the UK goes from here is even more so. But, irrespective of whether one believes that anything other than a hard Brexit is possible, the economy has so far been more resilient than many were expecting on June 24.
A case in point is the latest GDP imprint, which came in at 0.5%, significantly ahead of the consensus estimates of 0.3%.
As Investec pointed out: “Year-on-year growth was registered at +2.3% – the firmest pace of annual growth seen in more than a year. As the first GDP estimate covering the period after the UK’s 23 June vote to leave the EU, there is little evidence here of a near term Brexit-related economic slowdown.”
While it is equally possible that the slowdown that many expected will come over the next few quarters; that as Franklin Templeton’s Colin Morton puts it: “the impact on consumer pockets is unavoidable” what is equally unavoidable is that things so far are not quite as bad as many expected.
The final flashpoint in this list is equally impossible to predict, while the polls are showing the likelihood of a win for Hillary Clinton, nothing is guaranteed and, as the New York Times reported, there are even some worried about whether or not Donald Trump’s more extreme supporters would accept defeat quietly.
But, given the recent developments, particularly with regards the womens’ vote, Trump looks increasingly unlikely to win. And, even if he were to do so, what is perhaps a little encouraging is that a case can be made, at least in the short term, for a Trump win to be beneficial for US stocks.
As Thesis Asset Management research analyst, Ryan Paterson explains, the few policies that Trump has actually committed to could be beneficial to business: “Reducing corporation tax rates to 15% and unleashing massive infrastructure spend would benefit both company earnings and prospects for the economy,” he said.
Tomorrow Portfolio Adviser will resume its schedule of doom and gloom, as there is every possibility that this piece is horribly wrong, that the banking sector is doomed and Donald Trump could become the next American president. But, it is equally possible that the world and the economy are a little more resilient than many give it credit for and sometimes it is good to stick one’s head above the parapet and look through the darkness for the coming of the dawn.