June 19, 2016
Weekly Market Outlook
By Keith Schneider
The Stairs - Anatoloy Poutiline
This week world equity markets retreated, buffeted by the upcoming vote on June 23 deciding whether Britain will stay or leave the EU. This week US stocks ended down -1 to- 2%, along with the global equities in general. However, British stocks recovered smartly from the lows of its current swoon, but still remain under pressure and well off recent highs.
In another potential blow to the British realm, British rock group Led Zeppelin appears to have only partly written its most profitable and famous song “Stairway to Heaven”. One take- away from this revelation is that if one of the most famous British Rock Bands had to rely on material outside England to write its best song, then UK voters should take a cue and remain in the EU as part of the global community. Community not isolation is just good business and better for the human race.
There is dispute as to what will happen if Britain leaves and it varies. Dr. Doom thinks it’s a positive and the proof is staying out of the EU has worked well for Switzerland. This is according to eternal pessimist, Dr. Doom otherwise known as Marc Faber, publisher of the respected Gloom Boom and Doom report.
Jamie Dimon, CEO of JPMorgan is warning of the dire consequences requiring thousands of layoffs in its British operations should the Shmexit occur. Soros has been buying gold by the ton as a precaution and sees disruption, deflation and the end of the EU as we know it should the Brits vote in favor of leaving. Soros witnessed firsthand the Nazi invasion of Hungry, the consequences of xenophobia and is a big supporter of the EU.
Adding to the general malaise, tabloids and online media were dominated by murder and mayhem. The gamut ran from the murder of Jo Cox, one of Britain’s rising political stars, to the horrific Orlando nightclub massacre.
It’s dangerous to visit Orlando these days with alligators snatching toddlers and deranged shooters killing singers and shooting up nightclubs Add in Oscar Pistorius’s courtroom theatrics, trying to gain sympathy and obtain a lighter murder sentence and the backdrop is just heavy.
Risk off trades are dominating with US bonds and Gold very hot, signaling a flight to alternative currency and safety. Even Bitcoin has been exploding higher. The big names like Google, Facebook and Apple have been hit hard. The bright spot is market internals signaling some extreme pessimism which we will cover in this week’s video.
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