This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Wall Street has rallied as UK Prime Minister Theresa May won a no-confidence vote in her Tory party.
The US markets ignored the Brexit-based drama of the vote and rose 150 points as May won the no-confidence vote to remain prime minister.
Despite a no-confidence vote after May cancelled a vote on Brexit, the US markets rose after days of volatility in the US and UK markets. Many investors must have been assured that May would remain as prime minister.
How Brexit and Theresa May affect the US markets
While the US markets mostly rose after China cutting tariffs on US cars, there is also the relief that the UK will still have the stability of having the same leader for the next few years. Economic experts have shrugged off the Brexit turmoil and the May no-confidence vote affecting the US markets. Some have the belief that volatility of the markets is the new normal, like, Thomas Cole, chief executive officer(CEO), of Distillate Capital.
‘Volatility doesn't strike us as anything out of the ordinary,’ said Cole.
The uncertainty of the Brexit deal sparked sell-offs earlier in the year, as many investors were unsure of how the Brexit deal would affect trade between the US and the UK. Now that May will be prime minister for the next few years, investors may calm down as there will be stability in the UK until May steps down before the 2022 election.
What’s next for the US markets and Theresa May
The US markets are going to continue to deal with volatility because of trade issues with the UK if the Brexit deal ever goes through. Even though May won the no-confidence vote, she and Parliament still have to sort out how to break from the European Union (EU) in 21 months. Investors will be watching to see how Brexit will affect stocks in the UK and in the US.
.jpg)
