Stocks in the U.S. and Europe are reaching new highs on the one-two punch of trade and Brexit. Conditions remain positive for further gains in risk assets despite headline risks.
Last week, Boris Johnson and the Conservative Party in the U.K. scored their biggest win in over three decades — since Margaret Thatcher was prime minister. This majority will allow the U.K. to leave the EU in early 2020. The margin of victory was a bigger surprise than the victory itself and demonstrated the U.K. is not ready to embrace the leftward move of the Labour Party.
Other positive market-moving news included the “phase one” trade deal with China and the forward progress to approve the United States-Mexico-Canada Agreement. The positive turn on the trade front gives a boost to growth expectations for 2020.
Market highlights this week include several central bank meetings and the release of U.S. third quarter GDP.
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