UK Tories win, US and China agree to phase one, but markets mixed
This may be the pivotal week of 2019. Thursday night, Boris Johnson’s Conservatives won a majority in the U.K. election, which amounted to a second referendum on Brexit, three-and-a-half years after the first. The UK pound spiked and FTSE closed Friday up 1.3%. Now, Johnson has enough seats to push his legislation through the British parliament and to finally exit the E.U. by January 31.
Meanwhile, both China and America confirmed that they had agreed to phase one of a trade deal and that Sunday’s tariffs were now off the table. A report late-Thursday actually excited after-hours traders, but a Trump tweet early Friday, denying he was rolling back tariffs, erased gains in the futures. Only when China confirmed phase one at a news conference at 10:00 am E.S.T. Friday did markets get their confirmation.
But China as well as Trump offered no details, just confirmation that phase one was reached. The S&P and Down actually closed flat, though the Nasdaq made a record close. In fact, the TSX closed higher, up half-a-point and crossing 17,000. Two of the biggest gainers were Power Corp. and Power Financial. The Desmarais brothers announced they were stepping down as co-CEO’s of Power Corp. and merging their asset management and insurance businesses. PWF shot up 9.92% and POW by 7.9%, but neither has regained its heights before the 2008 recession.