Buy UK stocks or wait, is all down to Brexit and for a few days what will happen is anyone’s guess.
It would appear that May is starting to reveal her hand as a Remainer. Some will think she has messed up the Brexit deal so it is impossible for the UK to exit. So now the UK has to stay forever bound to the EU.
Pretty much all MP’s are ‘remainers’ so all they want is someone to blame for no-Brexit, rather than risk the chop from the voters in future elections. If they get their excuse no-brexit is assured. That position is close because a ‘no-deal-brexit’ = ‘no-brexit period’ is close.
So a revoking of article 50 now seems on the cards for this Friday, when the EU refuse to extend the article 50 period.
It is said that the EU cant stop a revocation of article 50, so this is the only outcome not dictated by the EU, many members of which would quite like to be shot of the UK. UK legislators and their lackeys don’t want to leave, even if some European countries would be happy to see the back of the English. This is especially the case for France who wants to bind the EU into a closer super-state style agglomeration. You cant really blame them for wanting the US of E, when ‘the United States of Europe’ is such an obvious fate for its members. The British will drag the whole process down, as even the UK ‘Remainers’ don’t want to go along that path even though staying will make them impotent. An inability to leave the EU, even after a plebiscite, in of itself makes the UK political system powerless within the EU, what leverage will it ever have now without the practical sovereignty of being autonomous enough to leave.
So for the UK to stay in the EU, the EU needs only to not extend the deadline for Brexit, leaving the UK politicians with an excuse to revoke article 50. Obviously, UK politicians will point the blame anywhere but at themselves and they might even get away with it.
If instead the EU delays the article 50 period, it will give the EU a chance to further crucify the UK polity, destroy remaining shreds of UK sovereignty and if the UK does decide to bomb out, have a chance to make the UK to actually leave on the worst possible terms to act as a deterrent for other countries who may on day think about leaving. It is a win-win for the EU.
The EU has got the outcome nailed on.
But for us, this week will decide if Brexit is a mirage or not. I revert to thinking as I did from moment one, that it is just such a fabrication. The whole sorry process is just a choreographed farce where representatives, all of which bar a few are ‘Remainers’ are simply trying to damage their political opponents, by sticking them with the blame for not honouring the Brexit referendum.
For Corbyn and his socialists they will give up their one chance in their lifetime of destroying the class enemy of the ruling ‘upper class’ elite by gutting the cosy capitalist structures of the City of London. For the Tories no Brexit will mark the end of the United Kingdom as a country in any meaningful independent sense, consigning its status to that of a region of continental Europe ruled from Brussels rather than in the past history by Rome, Denmark, Normandy, Anjou, Scotland, Holland or Hanover.
It still remains possible for the UK to fall out of the EU on Friday, but parliament would revoke article 50 rather than have the UK fall out of the EU if it gets the chance. It will likely get that chance.
Cynics say that by the nature of politicians, the Brexit crisis will be extend by all means necessary as long as it possibly can. I see that point of view has merit. However, all parties want it Brexit over and the UK political system and its elite want to stay in Europe and the possibility for revoking article 50 will come as a self-inflicted ‘fait accomplice’ that will end the saga.
What to do from an investment point of view?
If the UK is not out of the EU this week, it will never leave, which means the market will continue to rally. It will be safe to be vested.
If the UK is dumped out of Europe, as is still remotely possible, then after a few days of slump it will be time to buy into that dip. The market shouldn’t fall much because if markets have any ability to premept the future then much of the bad news should already be in the price.
Unless something very strange happens, next week will give a high probability road ahead on how to invest in the UK stock market, be it a no-brexit or hard-brexit road.
Once the dust settles either way, the market is going up.
The FTSE chart is saying the only way is up. While the small cap index, a clean indicator of the fundamental UK market show arecovery up to this crucial week and again a recovery that at very least suggest positivity.
If a vote to revoke article 50 is called, the airlines will rally hard. If you think this is going to happen then IAG is the airline to buy. I will be buying.