Yup, it's bounced from your support line now. Same lines I have on my chart. Range looks 6060-6430, until Brexit methinks.
FTSE 100 crossed 7200 this week - in fact it has been up 14% since Brexit. At the same time, UK economic growth forecasts have been lowered. Is something amiss? Why is the stock market not reflecting the impact of Brexit? Look closely: 1) FTSE 100 is mostly comprised of miners and multinationals with overseas operations that gained from Trump's infra spend prospects and a weaker pound that slid 17% during the year. These factors contributed to its rise of 14% in 2016, making it the best performing European market, despite Brexit. But in dollar terms, FTSE 100 was lower 5% over the year. According to a KPMG report, performance of FTSE 100 companies with more than 70% of their business in the UK was actually down 6%. 2) FTSE 250, which is more domestically focused and a better representative of the UK economy rose only 4% in 2016 and has clearly under performed when compared to FTSE 100 Going forward, continued weakness of the pound is expected to support FTSE 100, but there could be a delayed impact of pound's weakness on the UK economy through increased inflation.Uncertainty over Brexit negotiations is expected to harm investments and support unemployment as businesses hold back expansion plans. Higher inflation is expected to eat into consumption demand. Overall a drag in growth brought about by high inflation and low investments is expected to outpace the benefits from a weaker pound. Investors beware - All that glitters is not growth...! Read more about the UK markets here: http://www.cityfalcon.com/
#UKSupremeCourt #Brexit ruling tomorrow. $GBP to gain if ruling favors parliamentary approval to trigger #Article50 http://hubs.ly/H05ZWNp0
In stark contrast to the gloomy growth picture painted last year following Brexit, the Bank of England recently upgraded GDP growth forecasts for 2017 to 2% from 1.4% in November last year. Does this mean Brexit is a non-event for the UK economy? Will the referendum have no consequences on the UK economy? Well, for now, consumers remain confident and continue to spend. And this confidence was reflected in the Q4'16 GDP growth of 0.6%, driven by the services sector, which contributes to 80% of UK's GDP. Strong consumer spending has supported the expansion of the dominant services sector for now. The stimulus provided last year has clearly supported growth by decreasing the cost of borrowing and increasing credit availability. But it remains to be seen if this consumption driven growth can sustain the headwinds from higher inflation going further. The pound's continued weakness is expected to create some pain for the consumers as rising import costs drive up inflation. At 1.6% in December, it's already at two-year highs and is expected to overshoot the BoE's inflation target of 2% in 2017 to rise closer to 3% Is this resilience the calm before the Brexit storm shadows UK economy's future growth prospects?
