Strategy team - Kevin Gardiner and Victor Balfour (Wealth Management)
These are testing times for political analysts - but not (yet) for markets. Sometimes, even the most important constitutional and social issues can leave economies intact and markets unfazed.
Markets are not misanthropic - merely indifferent, and narrow-minded. They focus unfeelingly on expectations of corporate profitability and interest rates. And if those bottom lines are not affected materially - or if the likely impact is already priced-in - markets are capable of shrugging-off all sorts of natural and political disasters.
So it is not that surprising to see the major UK stock market indices, gilt yields and even the pound moving only moderately in response to the latest near-paralysis of the UK political process by the single-issue Brexit farce.
Despite the best efforts of the news machine to suggest otherwise - we read yesterday that sterling was trading like an emerging market currency, having fallen by roughly 1½% in trade-weighted terms - the markets did not slump, collapse or crash.
Some individual stocks were hit hard, and the softer pound itself militated against a bigger fall in the FTSE, but still: on a day when the UK ship of state looked (again) to be heading for the rocks, the main UK stock indices were little moved.
Things could yet change. There is no clear majority - in the cabinet, the Conservative Party, the Commons or the country - for anything currently, but we can imagine an accidental 'no deal' or 'new government' outcome. For now, though, even for the UK, it would be premature in this strategy blog to jettison the constructive view of the investment climate that has served well for almost a decade.
Globally, the case for staying broadly constructive is also still worth making. Geopolitical tensions are always with us - as, sadly, are humanitarian disasters - but can have little direct economic impact.
Similarly, idiosyncratic administrations in the US and Italy - next up: Germany? - need not lead to bad financial outcomes.
On the trade war front, as the US and China head towards possible talks at the end-month G20 meeting, remember that the US has a point, however crassly it makes it: current trading arrangements are tilted in favour of China, not the US. China's government is well aware of this, which may make its response to the US a relatively measured one.
Meanwhile, despite all the well-documented structural worries surrounding the global economy - the 'new normal', 'secular stagnation' - it is roughly two-fifths bigger now than at its pre-crisis peak in 2008, and unemployment in several major economies is at multi-decade lows. The upswing is getting on a bit, and growth is cooling, but there are few signs yet of the next US recession or financial crisis.
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