Breaking Up is Hard To Do

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The BREXIT proposal parliamentary vote was postponed yesterday for the simple reason that there was no chance it would pass. The chaotic negotiations are now even more uncertain. One of the biggest issues in the mix is the Ireland/Northern Ireland border once Britain leaves the EU. Lack of a trade deal (a “No-Deal” Brexit) could be extremely disruptive and economically disastrous. Companies in Northern Ireland are making contingency plans by stockpiling goods and devising manufacturing and staff workarounds but the damage would still be devastating. Lately, there has been talk of another referendum and even the potential cancellation of the entire deal. The EU high court affirmed that possibility yesterday in a ruling. As of now, no one knows where this will go but the market seems to think it cannot get much worse.

Meanwhile, riots in France, budget discourse in an economically fragile Italy and a third quarter dip in German GDP are indicative of the struggle in the Eurozone – one of the Big 3 along with China and the U.S. China is also struggling but is showing some positive green shoots in labor and credit markets, as it continues to stimulate its economy. Not surprisingly, the U.S., the biggest of the Big 3, recorded a tick down in the latest NFIB survey of small businesses amid all of the global uncertainty. Still, business optimism levels remain elevated near record high levels as the U.S. economy forges ahead in a pro-business environment. The World Economic Forum has just named the U.S. as the most competitive country in the world.

Please watch for the Global Perspectives 2019 Forecast – The Storm Before The Calm.

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