Weekly Digest – INVESTEC

Please click here to read the Weekly Digest, discussing the market reaction to last week’s Brexit Withdrawal Agreement.

Brexit continued to dominate the weekend headlines after a series of high profile resignations in the Conservative party last week. However, there were signs on Friday that the negative momentum for Theresa May and her Brexit proposal were abating, and there were no material fresh negative developments over the weekend. It seems that more politicians on both sides of the Commons are coming to the view that the deal on the table is better than no deal at all, though it is far from certain that it will gain parliamentary approval. Barnier’s offer to extend the transition period for another two years would certainly help the practicalities, though this would no doubt infuriate the Brexiteers.

Friday was an eventful day for rhetoric from global policymakers. First, Fed Vice Chair Clarida prompted a sell-off for the dollar after stating that there is evidence to suggest that the global economy is slowing. Later in the day, President Trump boosted sentiment by telling reporters that China was ready to make a trade deal with the US. Despite this, Sunday’s Asia-Pacific Economic Cooperation meeting saw no signs of thawing relations and no communiqué was released after the meeting for the first time in its 29-year history.

The Rightmove UK House Price data for November was out overnight, the key indicator being a 1.7% decline month-on-month in asking prices (compared to 1.0% growth in October). The Greater London region fell 2.4% year-on-year and property in Zone 1 fell 6.9%.

This week, the US market is closed for a full day on Thursday and a half day on Friday due to Thanksgiving. I am sure you are aware, given the high number of retail promotions, the annual ‘Black Friday’ shopping event takes place this week. The economic highlights on Friday include preliminary November PMI readings from around the world. Ahead of that, we have the ever-volatile US Durable Goods orders on Wednesday. The corporate calendar is thinning out, though tomorrow is a significant day for us with Compass, Halma and CRH all reporting. Later in the week, we have earnings releases from Sage and Kingfisher.