BUT… WHAT DOES ‘BREXIT’ MEAN?
“We can never know about the days to come, but we think about them anyway…”
Economists and market analysts have been thinking a lot about the Federal Reserve and the actions it may take before the end of 2016. Friday’s employment numbers helped fan the speculative fire. The U.S. Labor Department reported the unemployment rate remained at 4.9 percent with 151,000 jobs added during August.
The broad market consensus was 180,000 jobs would be created, according to MarketWatch. The publication cited a source as saying the report, “…wasn’t strong enough to force the Fed to raise rates in September, but it also wasn’t weak enough to raise concern about the U.S. economy or dampen the outlook for corporate earnings. As such it’s a mildly dovish report…”
Economists and political leaders also are thinking a lot about the impending British exit from the European Union (EU). At the G20 Summit – a forum for government and central bank leaders from 20 countries – British Prime Minister Theresa May confirmed, “Brexit means Brexit.” However, the BBC reported there remains a general lack of agreement within the British government about exactly what the country’s relationship with the EU should be after Brexit.
The potential effects of Brexit gained some clarity at the G20. The Guardian reported, “…the U.S. wanted to focus on trade negotiations with the EU and a bloc of pacific nations before considering a deal with the U.K.” In addition, it reported Japan threatened, “…a string of corporate exits from the U.K. unless some of the privileges that come with access to the single market are maintained.”
U.S. stock markets remained sanguine. The Dow Jones Industrial and Standard & Poor’s 500 Indices finished the month almost flat. Most stock markets across Europe finished the month higher.
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* “Brexit means ‘Brexit'”
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html (Click on “U.S. and Intl Recaps,” “U.S. rate expectations drive markets,” then scroll down to the “Global Stock Market Recap” chart)