Exactly one week on from writing my last column I thought it a good time to revisit the outlook for our old British chestnuts. Some might describe this exercise as picking up the pieces or going over the bones. Not exactly useful, so the next thing to do is see which markets benefited, which lost out, and the third option, which many forget - which didn't budge. Remember that no reaction need not necessarily be 'a good thing'.
Readers should also keep in mind that repercussions from the vote have been global, underlining the interconnectedness of all economies, reminding how revulsion against elites crosses international borders, and that fragility in the financial system has persisted for at least 15 years. Therefore it's not in the least bit surprising that banks, fund managers and wealth offices have been hard hit - as forecast last week. Have they further to go? Probably, but remember that banking systems in other countries are potentially in an even more precarious state than those in the UK.
Sterling against the US dollar has hogged the limelight, slumping by a grand total of 18¢ on the morning of Friday 24 June for the biggest one-day move I think I can remember. However, the most important currency pair is euro/sterling, which went from 76p per euro to almost 84p in two trading days. A 10 per cent FX move is not to be sniffed at, but is well within normal quarterly ranges; the shock was that it happened so quickly. Now halfway between 2008's weakest for the pound and 2015's post-Lehman recovery, it ought to settle around current levels.
In terms of interest rates, the combination of a potential rate cut by the Bank of England and a rush out of banks means gilt yields are at new record lows: 13 basis points on two-year, 93 on 10-year and 179 on 30-year. If you think that's extreme, may I point out that index-linked 30-year gilts yield a nominal minus 125 and 10-year a negative 148 basis points.
For a take on equities we'll look at the FTSE All-Share, opening at 3481 and slumping to 3168, then settling at 3348 on Friday. Again, the biggest daily move in ages and one of the biggest weekly swings in a long time. Yet nevertheless we remain at June's midpoint and well within the massive band that has dominated since 2013 (3200 to record high at 3845). The downside is still the Achilles heel, here and in a host of others.
Some suggest turning to the 'Tina' trade: there is no alternative. Not exactly appealing but, needs must. This consists of safe havens, specifically gold, although stockbrokers will usually include developed market indices. I'm not so sure in that these have seen no significant gains in a long time.
