March 2019 - Market Review
With Brexit still unresolved and the clock counting down to the 29th March deadline, the Government is continuing to try and push Theresa May’s Brexit deal through the House of Commons. During this month the Government has been defeated in a second “meaningful vote” on the Prime Ministers Brexit deal. The House of Commons has also voted against leaving the EU without a deal and in favour of seeking an extension of Article 50 beyond the current Brexit date of March 29th. This request for an extension would have to be granted unanimously by all 27 EU member states. If an extension is not granted and Article 50 is not amended, the UK will still leave the EU on 29 March as planned.
Following the votes, Mrs May reminded MPs that “the legal default in UK and the EU remains that the UK will leave the EU without a deal unless something else is agreed”. She warned that “a short technical extension” to Article 50 was only likely to be granted if a deal were in place. Otherwise, a much longer extension is likely to result, meaning that the UK will have to partake in European elections if the extension goes beyond 22 May. Moreover, an extension to Article 50 is no guarantee that a fresh agreement will be reached. The Prime Minister is hoping to put her deal to the House of Commons for a third time before the 29th March, however the Speaker of the House of Commons, John Bercow, has ruled that the deal cannot be brought back for a third time without substantial changes. Meanwhile, Chief EU Brexit negotiator Michel Barnier has said: “The EU has done everything it can … The impasse can only be solved in the UK”.
The US announced it would delay its planned tariff increases on Chinese goods – which was due to take effect on 1 March – although the two countries had failed to reach a trade agreement during their meetings in February. Meanwhile, after Congress rebuffed President Donald Trump’s demand for funds for a US/Mexico border wall, the President declared a national emergency in a bid to circumvent Congress by using military funds. The House of Representatives subsequently voted to overturn his controversial declaration, which will have to face a vote in the Senate. The US economy grew at an annualised rate of 2.6% during the fourth quarter of 2018, having expanded by 3.4% in the third quarter. The Dow Jones Industrial Average Index rose by 3.7% over February.
Consumer confidence in France rebounded in February to its highest level since before the “gilets jaunes” protests began. Sentiment rose as President Macron’s stimulus measures began to take effect; these policies were expedited in response to the damaging protests. Concerns about unemployment eased to pre-protest levels, although consumers remain cautious about their scope to make major purchases. The benchmark CAC 40 Index rose by 5% during the month.
Japan’s economy expanded at an annualised rate of 1.4% during the final three months of 2018, having shrunk by 2.6% in the previous quarter following a series of natural disasters. During February, the Nikkei 225 Index rose by 2.9%.
Posted by Paul Burley on
19 March 2019 at 4:00 PM
29th MarchArticle 50BrexitMeaningful VoteMexico Border WallUS tariffs