Of course much of the reason has to do with the Brits themselves. Much like mainstream GOP voters, who are now mortified at the prospect of Trump, the U.K. populace woke up the next morning with the single horrifying thought – “What have we done?” Ever since then, U.K. politicians have been scrambling to mitigate the fallout from the vote.
U.K.’s new Prime Minister Theresa May, who herself campaigned on the Remain side, has made all the right noises about following through while actually doing everything she can to make sure that Article 50 is never invoked. Remember that until the U.K. actually invokes Article 50 — to formally give notice — the country remains a full-fledged member of EU. And it’s business as usual for all concerned.
|Little wonder that the British pound has stopped falling.|
Little wonder then, that the British pound has stopped falling. The pound has basically hovered above the 1.3000 level to the dollar for more than a month, despite some horrid U.K. data that saw business sentiment drop at its sharpest rate on record. The basic line of thinking among traders right now is that Brexit is bull: U.K. authorities will somehow figure out a way to undo the vote, keep Great Britain in the union and preserve London’s coveted position as the finance center of the world.
|“The basic line of thinking among traders is that Brexit is bull.”|
Tomorrow, the Bank of England meets and all signs point to a rate cut. But, there is a debate as to how deep the cut will be. Right now, U.K. rates stand at 50 basis points. The BoE could take an ax and chop rates down to zero essentially as a preemptive move to keep the country from falling into a recession. Or, it can move gradually and slice just 25 basis points off the rate and preserve its options for further easing down the road. Either way, the market focus will be on the central bank’s assessment of the current state of the U.K. economy.
For now, the country appears to have avoided financial Armageddon, and the capital flight that so many investors feared would take place has not materialized. Of course, that could all change in a flash if U.K. authorities actually decide to pull the trigger on Article 50. But until that happens, Brexit is looking more and more like a tempest in a teapot and the currency could see a rebound as more investors breathe a sigh of relief.
Payroll processor ADP estimates that American companies added 179,000 jobs in July, reports U.S. News & World Report. A survey by ADP indicates that the services industry added 185,000 jobs and manufacturers added 4,000 jobs. However, construction companies slashed enough workers to significantly negate those gains. Still, the July job estimate affirms a wobbly upward trend that includes 144,000 new jobs in April, 11,000 in May, and 287,000 in June.
Advertising executive Kevin Roberts has agreed to leave the Publicis Groupe after he triggered a firestorm by making dismissive, sexist remarks about gender diversity in the advertising industry, reports The New York Times. In an interview with Business Insider, Roberts reportedly suggested women were happier in non-leadership roles and stated that the discussion over gender diversity was “all over” on Madison Avenue.
For the first time in history, the U.S. government has approved a plan by a private company to fly to the moon, reports CNN.com. The company, called Moon Express, has stepped up to compete for the $25 million Lunar XPrize. The jackpot has been put up by Google for the first privately financed expedition to reach the moon before the end of 2017.
Hulu – the streaming TV service – is worth $5.8 billion, reports CNN.com. That’s based on Time-Warner shelling out $580 million for a 10 percent share of the service, which offers TV content via numerous platforms, including computers and smartphones. Time-Warner joins three other companies that own parts of Hulu. They are Disney, Comcast, and 21st Century Fox.
The Money and Markets team