End of August Markets and Johnson’s Political Ploy | Calamatta Cuschieri

Today’s article gives a summary about how the markets closed for the month of August

The local equity market experienced a minor slowdown which was reflected in the MSE Equity Total Return Index. The price changed from 9,782.83 to 9,769.84. With respect to the Government Stocks there was a slight decrease which was also reflected in the MSE Malta Government Stocks Total Return Index with a price movement from1,142.29 to 1,139.51. This decrease is meaningless when compared to the ongoing market increase that we have been experiencing from early June.          

European stocks closed 0.6% higher on Friday, with almost every sector in positive territory. However, Friday’s rally marked the end of a volatile month for European stocks. This rally was a result of China’s accommodating tone over its trade war with the U.S., while British opposition lawmakers plan to trigger an emergency debate to prevent a no-deal Brexit. Britain’s FTSE 100 index, which was up 0.3% at the closing bell, was down 5.3% in August in its worst monthly fall since August 2015.

U.S. Stocks were little changed on Friday as investors took a breather following a wild month of trading. The major indexes posted their worst monthly performance since May. The Dow fell 1.7% in August while the S&P 500 lost 1.8%. The Nasdaq pulled back 2.6%. U.S.-China trade relations intensified this month, rattling investors. The 10-year Treasury note yield fell below the 2-year rate this month. This is known as a yield-curve inversion and experts fear it because it has historically preceded recessionary periods in the U.S.

Johnson announced Wednesday that parliament would be suspended from September 9 until a Queen’s Speech on October 14, leaving lawmakers seeking to block a no-deal exit little time to pass legislation.

Analysts at top global banks are divided on what U.K. Prime Minister Boris Johnson’s controversial suspension of parliament will mean for Brexit. The possibility of Britain exiting the bloc with no deal has been at the heart of the debate since Johnson took office, vowing to leave on the October 31 deadline with or without a new withdrawal agreement.

Britain’s National Farmers Union wrote to Prime Minister Boris Johnson on Friday calling for import tariffs on eggs, some dairy products, horticultural products and grains if Britain leaves the European Union without a trade deal. British agricultural exports to the EU are expected to face tariffs under a no-deal scenario, but in March the government under then Prime Minister Theresa May announced a plan to eliminate tariffs on many imports, including some dairy products and agricultural products, to avoid a so-called hard border with Ireland.

 

This article was issued by Peter Petrov, Junior Trader at Calamatta Cuschieri. For more information visit, https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

More in Business Comment
Markets Summary | Calamatta Cuschieri
Business Comment
Calamatta Cuschieri
Markets Summary | Calamatta Cuschieri
Business Comment
Calamatta Cuschieri
Markets Summary and Airbus Shares | Calamatta Cuschieri
Business Comment
Calamatta Cuschieri
Markets Summary and commodities update | Calamatta Cuschieri