Author Topic: How Stock Markets in Different Countries Reacted to Brexit (A map)  (Read 3525 times)

maizeman

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It's interesting that the UK stock market seems to be a lot less bothered by the "Leave" vote in the UK than the southern Eurozone nations.



I just googled "country name" plus "stock index" so apologies if I sometimes picked a weird one. A holiday in lots of Baltic and Scandinavian countries (Dark Gray) means their stock exchanges weren't open today.

trashmanz

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #1 on: June 24, 2016, 07:24:44 PM »
It's interesting that the UK stock market seems to be a lot less bothered by the "Leave" vote in the UK than the southern Eurozone nations.



I just googled "country name" plus "stock index" so apologies if I sometimes picked a weird one. A holiday in lots of Baltic and Scandinavian countries (Dark Gray) means their stock exchanges weren't open today.

Why is that interesting?  It was their decision.

maizeman

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #2 on: June 24, 2016, 07:35:25 PM »
Well I thought it was interesting because most of the news coverage I've heard/read today has focused on how the leave vote is supposed to be terrible for Britain, and hadn't heard much reporting with the spin of how the leave vote was bad news for the rest of the EU.

wienerdog

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #3 on: June 24, 2016, 07:36:09 PM »
Even more interesting Greece, Italy, Portugal, Ireland, Spain, France all carry high debt to GDP percentages of 90% or more.

LAGuy

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #4 on: June 24, 2016, 08:36:13 PM »
One of the things this map doesn't take into account is the tanking in the Pound. For example, imagine the extreme example if their stock market didn't move, but their currency went to "zero". In effect, their stock market would have just crashed as well, since the rest of the world could now buy it for "free"

maizeman

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #5 on: June 24, 2016, 08:39:53 PM »
Oh that's a good point! The Pound is down 4.63% against the Euro. So that would put the UK closer to Ireland/France (which honestly makes more sense), but still way ahead of Spain, Italy, and Greece.

MustacheAndaHalf

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #6 on: June 25, 2016, 12:40:17 AM »
Thanks for sharing that country graph - I was wondering if what's displayed there was going to happen.

The way I see it, the fear isn't the United Kingdom - it's that other countries could see an advantage in being next to leave the EU.  But these countries wouldn't just reorganize - they would drop the Euro and start using their own currency.  They would use inflation as a way out of their problems.  For example, Greece takes the biggest hit because they might view leaving the EU as a way to regain control of their economy, of exiting the Euro.  The weak economies are more likely to leave now, and the losses reflect a sort of "who might be next" fear, in my view.

Just to highlight flaws in my own views here (healthy for any investor) - I don't understand why France took a larger hit than Iceland.  Maybe the impact there does reflect reduced trade with the UK... I wouldn't expect France to leave the EU before Iceland.
« Last Edit: June 25, 2016, 12:44:50 AM by MustacheAndaHalf »

lemanfan

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #7 on: June 25, 2016, 04:46:44 AM »
As for Spain, they have a general election on Sunday, so it is probably a little extra edgy there.

former player

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #8 on: June 25, 2016, 06:01:31 AM »
Portugal, Spain and Greece are big net recipients from the EU budget (along with Poland), whereas the UK is the second largest net contributor to the EU budget, after Germany.  If the UK leaves, there is a lot less money for the EU to transfer to those countries, all of which have lagging economies with significant unemployment levels and deeply indebted governments.   As a big net contributor France might be expected to pick up the bill, plus it has its own problems at the moment.

GrOW

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #9 on: June 25, 2016, 06:08:05 AM »
Portugal, Spain and Greece are big net recipients from the EU budget (along with Poland), whereas the UK is the second largest net contributor to the EU budget, after Germany.  If the UK leaves, there is a lot less money for the EU to transfer to those countries, all of which have lagging economies with significant unemployment levels and deeply indebted governments.   As a big net contributor France might be expected to pick up the bill, plus it has its own problems at the moment.

Agreed. UK, a payer, is leaving the EU. The other payers like Germany and France are very nervous about how much more they may have to pay in the future. The takers like Greece and Portugal are very nervous about how much less they can take in the future.

Its not often that you can separate payers and takers into segments for voting purposes. They are often part of the same vote fighting for different outcomes.

Kaspian

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #10 on: June 25, 2016, 09:40:15 AM »
I wonder why Asian markets freaked out so badly? 

Honestly, I was expecting to open my portfolio today to a bloodbath of carnage, but my diversified portfolio is only down 1% in total.  ...That's just a run of the mill trading day, really.


nobodyspecial

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #11 on: June 25, 2016, 11:20:58 AM »
The Eu is the biggest market for a lot of Asian countries - bigger than the US.
If things in the Eu are going to get rough, they are going to be buying a lot less made in China / Korea / Japan consumer goods.
 

LAGuy

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Re: How Stock Markets in Different Countries Reacted to Brexit (A map)
« Reply #12 on: June 25, 2016, 04:24:37 PM »
I wonder why Asian markets freaked out so badly? 

Honestly, I was expecting to open my portfolio today to a bloodbath of carnage, but my diversified portfolio is only down 1% in total.  ...That's just a run of the mill trading day, really.

Like I pointed out above, currency movements are more to blame here. Just like how the FTSE didn't move down that much because it's currency crash handled that for it. The reverse is true for the Nikkei. Japan is seeing a currency flight to safety; a strong Yen is going to be bad for Japanese exports and hence its stocks. Additionally, to compensate for the large rise in currency, the market must move down on balance.

It's really better to look at Brexit in terms of a currency crisis. This isn't even remotely about the various worldwide stock markets. Conditions for business haven't really changed. In fact, if the Pound doesn't rebound I'd even expect the FTSE to outpeform  in the months ahead. Of course, expect a large amount of inflation as well. Which might not be that bad for the Brits, since nobody else in the world seems to be able to solve the low inflation knot. What you're seeing is a reordering of worldwide asset prices based on currency fluctuating.

For the US, I'd expect a repeat of what we saw earlier in the year. A strong currency, low commodity prices, and a struggling stock market.
« Last Edit: June 25, 2016, 04:26:58 PM by LAGuy »