US president Donald Trump is making headlines once more today after his long-time lawyer pleaded guilty to arranging payments “at the direction” of his former boss during the 2016 campaign. When the news broke not long after the close of Wall Street last night stock futures took a swift dip, but European markets have recovered this morning with the FTSE 100 trading pretty much flat on the day. The pound enjoyed a solid day of gains against the US dollar yesterday, largely due to Trump’s remarks that he wasn’t thrilled with the Fed hiking rates, and the pair now trades back around the $1.29 level.
Longest bull market ever?
Barring a highly unlikely crash, today will mark the longest ever bull market for US stocks. The S&P500, which is a benchmark for the largest 500 US companies by value, will break the previous record of 3452 days without a fall of 20% or more - the most widely used definition of a bull market. This rally began on 9 March 2009, and by today’s close will have broken the previous record from the 90s.
However, there is some measurement errors which need to be considered here, with the previous record which ended in 2000 being commonly accepted as having begun in October 1990. This is really an example of a rounding error because the decline into the 1990 low was actually 19.92% which of course rounds to 20%, but doesn’t really represent an exact decline of this size or greater. Nonetheless, a rise of more than 320% in the last 9 ½ years is no doubt impressive, especially when you consider the shocks and obstacles overcome in that period.
Brexit negotiations entering final stage
The chief Brexit negotiator for the EU, Michel Barnier, has promised to intensify talks with the UK as the parties enter the final stages of discussions ahead of next March’s deadline. After meeting the UK’s counterpart, Dominic Raab, Mr Barnier said yesterday that “negotiations are entering the final stage” and from a market view the event risk will likely ramp up significantly in the coming months. There remains a worryingly high probability that an agreement won’t be reached before Article 50 is triggered and as this deadline comes ever closer there is a good chance that we see the pound in particular, become increasingly sensitive to Brexit-related comments in the weeks and months ahead.
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