Calm before the storm?

[1nvest]

The question then becomes how UK shares will respond. My guess is it is not fully priced in yet and whatever their exposure to the UK itself there will be a further general hit to all UK listed companies if we do end up with no transition period agreement. Another good reason not to put all of ones investment eggs into the UK basket.

Actual UK/EU trade is relatively small, wont affect the majority of UK companies at all, some will significantly benefit. In some months the largest value export item from the UK into the EU was ... gold.

Potentially the higher the barriers on EU access to the UK's internal market the better. As that could lead to more rapid repatriation of UK assets/jobs back into the UK, such as rail, utilities ..etc. The UK not subsidising EU competitors is positive move. In the EU corridors (not in the Euro) had the UK at a distinct disadvantage. A EU controlled puppet bound by its rules, but disadvantaged within the group.

[77ss]

......
Actual UK/EU trade is relatively small.....

Are you being serious?

I would not call 43% of all UK exports 'relatively small'!

[1nvest]

......
Actual UK/EU trade is relatively small.....

Are you being serious?

I would not call 43% of all UK exports 'relatively small'!

1970 to 2019 United Kingdom exports of goods and services as percent of GDP averaged 25%. Around half are services that flow freely or can continue access via skeletal presence within the EU (most in that position have already prepared such). So UK goods exports to the EU are around 5% of UK GDP (relatively small). Much of that is round-robin, vehicle components to-and-fro (counted multiple times) until a assembled vehicle, or bottles/packaging exported to have labels stuck on in Ireland before being re-imported again.

Much of UK trade can be redirected, agreements to transition (net deficit for UK) existing imports/exports over to non-EU - i.e. relatively easily replaced. The UK is the EU's largest single country export market, not so easily replaced. The higher the barriers to EU access the better IMO, as that will promote more rapid expansion of the likes of Southampton (non-EU) over Dover (EU) - for the better. Or better still look to repatriate UK assets and jobs - as per Trump, promote a "UK first" policy/practice. Slap on 90% tariffs so that UK rail, utilities ..etc. naturally repatriate rather than helping to subsidise EU based rail/utilities/shareholders.

EU rules were set across (formerly) 28 conflicts of interests, often with significant bribery involved. Not being bound by such rules, not having to import higher cost EU products/having others disadvantaged, will be a positive for the UK. The EU will have to compete on a levelled basis, and where likely more often it will be deemed to be uncompetitive.

[1nvest]

2019 and the UK's largest export product to the EU was refined petrol, from crude imported from Norway. Second largest was vehicles. Combine vehicle parts into that and vehicles were the largest element, combined with petrol accounting for getting on for 30% of total UK exports to the EU. In the other direction vehicles were the largest single item export from the EU into the UK.

For UK exported goods the largest surplus trade was with Ireland, near enough the only surplus trade partner (£14Bn) as the others .. Malta, Luxembourg, Finland and Cyprus are in the scale of things near zero. All the rest .. net deficit, with Germany by far the largest.

Given the UK has (or rather had until Covid-19) a $3 trillion economy/GDP those affected is relatively small. IIRC when Gove was looking at how many UK firms were prepared for no-deal Brexit, only around 0.5% had any trade activity with the EU - the majority had no direct activity with the EU (but nonetheless are bound by EU rules).

Such are the scare story extremes that we've been blitzed with for years now - where many seem almost hopeful of a self fulfilling (doom) prophecy. Potentially however that could all be another millennium bug non event, or even given such extreme talk-down the upside realities could prove to be massive. Another year and the Pound could be up by a large amount, as could stock price valuations. Shorting the Pound/UK stocks could see large losses.

[77ss]

......
Actual UK/EU trade is relatively small.....

Are you being serious?

I would not call 43% of all UK exports 'relatively small'!

1970 to 2019 United Kingdom exports of goods and services as percent of GDP averaged 25%.......So UK goods exports to the EU are around 5% of UK GDP (relatively small)...

Don't like to be corrected? Then wriggle. But you have done a very bad job of it.

The 2019 figure was 43% - what happened in 1970 (50 years ago!) is irrelevant. Astonishingly obvious.

Your 'relatively small' remark was clearly in the context of overall trade. Changing the goalposts to 'as a %age of GDP' doesn't make your original post any less miseading.

I think you are allowing your political opinions (no problems there, we all have them) to distort your thinking.

[TUK020]

Twitchy headlines about European lockdowns,
Stock markets starting to slide a bit,
Bit of a VIX uptick: https://www.marketwatch.com/investing/index/vix/charts
Boris the Incompetent et alia pushing for a world beating game of chicken with the EU juggernaut?
I wonder - is the brown stuff on trajectory for the rotating blades?

[Adamski]

Think we've had a correction of sorts, as Ftse 100 is down 14% from 8 June high. S&P so far down 7.5% down from 2 September. With prices on the slide rather than sudden correction, so far. Guess shouldn't complain as my PF is back to break even year to date after a rollercoaster. But kind of disappointing nonetheless. As always will be buy opportunity when everyone is doom and gloom, but this time most things are at high valuations so I'm not sure I'm brave enough to buy yet.

[richfool]

Methinks there might be a bigger storm to come next year, when all the money being thrown into the system and the resultant record government debts, start coming home to roost.

[Dod101]

Today is bad enough at least for the blue chips, Unilever, Diageo AstraZeneca and others no doubt are all well down today. Why?

Dod

[jackdaww]

Today is bad enough at least for the blue chips, Unilever, Diageo AstraZeneca and others no doubt are all well down today. Why?

Dod

==============================

uncertainty re us election .

covid19 economic effect.

magic money tree cant go on forever --- can it ?