The stock market of Europe has uncertain prospects
European stock markets in the near future are rather uncertain prospects. On the one hand, they are supported by the strengthening of the Euro after the decision of the U.S. Federal reserve rate. The only exception will be the UK market where the FTSE 100 index is constrained to be relatively expensive pound, which negatively affects stock prices of British companies exporting. The fed’s meeting in late July, the expected lowered the benchmark interest rate to 2-2. 25% 2.25-2.5% per annum, and this was the first drop in the last 10 years.
On the other hand, the fed’s Jerome Powell in a press conference following the meeting said that the rate reduction was a policy adjustment in the middle of the cycle and that he does not consider it as the beginning of a long cycle of declining rates. Comments Powell proved tougher than expected, the investors, and such statements disappointed them.
Another factor that will affect the future dynamics of European markets is still unresolved trade issue between the U.S. and China. At the end of the next round of trade negotiations, it became clear that they were quite constructive, but has not yet led to any concrete results.
And, of course, a lot of attention of the European investors will continue to pay on the prospects for Brexit without a deal. The British authorities will allocate 2.1 billion pounds for the preparation of such a scenario of exit from the EU. Funds will be allocated in stages: first 1.1 billion pounds mark for a number of sectors and regional administrations, and then another 1 billion will be provided to enhance operational readiness.