Skip to main content

The markets got it wrong again - time to bet on uncertainty?

The markets got it wrong, again

Shutterstock 624878165 l1

The financial markets thought they were going to get a strong and stable result (at least until late yesterday), what they didn’t want was uncertainty, but the British electorate has given them confusion. So whilst the markets have probably got it wrong again, with strong support for the pound (predicting a Tory victory), the reaction is now mixed.

The currency markets are down, and this has impacted on the rise of the FTSE 100, but so far the markets are steady awaiting news from the current prime minister - we have seen nothing like the reaction after the shock of Brexit. Despite media hype and also Labour ambition, it seems only a Conservative government is realistic either in a minority or with the DUP. The biggest threat now to the markets is the Brexit negotiations and the UK negotiating hand is significantly weakened but on a positive it looks likely only a soft Brexit would be palatable - unless of course we have another election in October...

By Professor Adrian Bell

Time to bet on uncertainty

The only thing certain is that we are living uncertain times. The markets don’t seem too surprised on the election results, but until a clearer picture emerges on the political front regarding government and the (possible change in the) persona of the prime minister, volatility in most financial markets will prevail. Time to bet on it? It is hard to predict directional changes; but whatever the chaos, a crash is not guaranteed.

By Dr Emese Lazar

Published 9 June 2017

You might also like

Learning from the Competition

19 November 2018
ICMA Centre Visiting Fellow Dr Keith Arundale was featured in the November 2018 issue of the ICAEW’s Corporate Financier magazine. The article “Learning from the Competition” was based on Keith’s PhD research into the difference in investment practices of European and US venture capital firms and in their structural characteristics and the wider environment in which the firms operate, including cultural differences and attitudes to risk. Keith’s thesis is that these differences contribute to the lower historic performance of European VC funds compared to US VC funds.
Research news

A Free Lunch?

29 August 2018
Fidelity, the asset manager with $2.4 trillion assets under management, recently announced the launch of two index mutual funds with a 0% fee! This announcement is interesting for several reasons. First, the asset management industry has been involved in an intense price war and this new fee level of 0% represents a very tough benchmark for the competition to beat. Not surprisingly, the share price of rival asset managers fell by a few percentage points shortly after the announcement. Second, the new fee level is unusual as it indicates that, for the first time, investors could get exposure to both US and international equities without incurring any fee. This is a curious business decision. How will Fidelity manage to pay for all its expenses? Will this product be a loss-making venture? Is there more to it than meets the eyes?

Head of ICMA Centre wins award

17 July 2019
Dr Carol Padgett has won the 2019 University Teaching Fellowship scheme. Hosted by the Centre for Quality Support and Development, the award recognises staff who demonstrate individual excellence in teaching and support of student learning.
Press releases