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Some said it wouldn’t actually happen, despite last summer’s vote in the United Kingdom (UK) to formally de-couple from the European Union (EU). But earlier today — mid-day Wednesday, Brussels time — a letter signed by Prime Minister Theresa May formally invoking Article 50 of the Lisbon Treaty, the measure necessary for Brexit to occur, was delivered to the president of the European Council.
Tremors have not ensued as a direct result, at least not yet. Analyst don’t particularly believe this initial step for the UK and EU to go their own separate ways will have a major impact on stock markets in the U.S., but subsequent stalls or exchanges to come as the move continues carry plenty of uncertainty along with it, even for those closely following the Brexit issue.
Then there is the global backdrop to consider: the U.S. dollar had been strengthening versus the British pound anyway, and though the pound is +1% versus the dollar since 2017 began, worries from inside the UK largely orbit the concept of a pound crash as the decoupling completes. May herself has presented herself as staid and direct throughout her quick emergence in British rule, and signing the Article 50 letter did not cause her hand to tremble, but outside forces will soon need to be dealt with.
Britain’s main trading partners in Europe are obviously the first level of concern, and though deals are already being worked out with Germany and other important economies within the EU, we can already see resistance creeping up. Scottish Parliament is holding an independence referendum to in some way remain part of the EU despite its membership within the UK; how something like this will look when the smoke has cleared is anyone’s guess.
U.S. pre-markets are close to break-even, indicating American traders are not at all concerned with the chain of Brexit events as of this morning. This follows the best performance of the S&P 500 in the past two weeks in Tuesday’s regular trading, built largely on energy stocks coming back in favor as the Trump administration sets about aggressively rolling back regulatory policies of the Obama administration. Zacks Rank #1 (Strong Buy)-rated Arch Coal (ARCH - Free Report) and Zacks Rank #2 (Buy)-rated Pioneer Energy Services were both up well over 1% Tuesday.
Image: Bigstock
Article 50 Submitted, Triggering Brexit
Wednesday, March 29, 2017
Some said it wouldn’t actually happen, despite last summer’s vote in the United Kingdom (UK) to formally de-couple from the European Union (EU). But earlier today — mid-day Wednesday, Brussels time — a letter signed by Prime Minister Theresa May formally invoking Article 50 of the Lisbon Treaty, the measure necessary for Brexit to occur, was delivered to the president of the European Council.
Tremors have not ensued as a direct result, at least not yet. Analyst don’t particularly believe this initial step for the UK and EU to go their own separate ways will have a major impact on stock markets in the U.S., but subsequent stalls or exchanges to come as the move continues carry plenty of uncertainty along with it, even for those closely following the Brexit issue.
Then there is the global backdrop to consider: the U.S. dollar had been strengthening versus the British pound anyway, and though the pound is +1% versus the dollar since 2017 began, worries from inside the UK largely orbit the concept of a pound crash as the decoupling completes. May herself has presented herself as staid and direct throughout her quick emergence in British rule, and signing the Article 50 letter did not cause her hand to tremble, but outside forces will soon need to be dealt with.
Britain’s main trading partners in Europe are obviously the first level of concern, and though deals are already being worked out with Germany and other important economies within the EU, we can already see resistance creeping up. Scottish Parliament is holding an independence referendum to in some way remain part of the EU despite its membership within the UK; how something like this will look when the smoke has cleared is anyone’s guess.
U.S. pre-markets are close to break-even, indicating American traders are not at all concerned with the chain of Brexit events as of this morning. This follows the best performance of the S&P 500 in the past two weeks in Tuesday’s regular trading, built largely on energy stocks coming back in favor as the Trump administration sets about aggressively rolling back regulatory policies of the Obama administration. Zacks Rank #1 (Strong Buy)-rated Arch Coal (ARCH - Free Report) and Zacks Rank #2 (Buy)-rated Pioneer Energy Services were both up well over 1% Tuesday.
Mark Vickery
Senior Editor
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