6/20-6/24/16 Charts of the Week

The votes are in and by now it is no shock that the U.K. has voted to leave the European Union….

cameron headline

Despite polls for weeks that stated the U.K. was likely to stay, voters turned out and by 4 points voted to leave the political-economic union. If nothing else, the results of the Brexit vote have taught us that the experts might not have a clue what they are talking about, be it in regards to political events or financial markets. For example, take these employment figures that came out just before the last FOMC meeting, which were supposed to show signs of strength in the labor markets…

jobs report

Or this headline that came the day after pundits were certain that a rate hike was coming in June…

fed leaves rates unchanged

Or this headline from Economics21.orgĀ showing Goldman Sachs’ inability to accurately forecast crude oil prices (for reference, oil currently sits at about $48/barrel).

goldman oil headline

Following the shock of the Brexit vote, markets responded sharply lower, as the Dow quickly dropped several hundred points…

dow after brexit

Treasury yields tumbled…

us10yr after brexit

And the Pound Sterling tanked relative to the US Dollar…

usdgbp

All the while precious metals quickly turned higher…

gold rally

We have written many times about how institutional investors and hedge funds tend to have algorithms that they use to create portfolio allocations. When they make a prediction, in this case on the U.K. voting ‘Remain,’ and the vote goes the opposite way, those models are quickly updated and the markets can experience wild swings.

For investors that are curious as to how to benefit from macro-economic shifts such as the Brexit vote, we encourage you to call or email us through our Contact Us page to schedule a complimentary, no obligation consultation.

 

Happy trading!

Ben Treece is a partner with Treece Investment Advisory Corp (www.TreeceInvestments.com) and licensed with FINRA (www.Finra.org) through Treece Financial Services Corp. The above information is the opinion of Ben Treece and should not be construed as investment advice or used without outside verification.
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