Major indexes, as well as commodities advanced on Tuesday to cut the losses accumulated since June 25th. Oil was up just over 2% in the NYSE, while the Dow-Jones, FTSE and Nikkei all saw sizable advances. The Euro recovered somewhat against the US Dollar, as did most major currencies – including the British Pound – which lost value against the Greenback as soon as investors started looking for safe havens to protect their capital from the Brexit whiplash.
Along with the Greenback, gold shed about 0.5% of its value as panic abated. Still, volatility is expected to remain quite high in the markets, and investors will be listening carefully to what the politicians and bureaucrats in Europe have to say. Reliance on certain comments or headlines, will for sure hold the markets hostage to speculation, as much as European leaders are claiming they are being held hostage to Brexit.
Maybe it is time for political leaders to work hard in order to solve the underlying economic problems that undermine the long term stability of markets, instead of filling the sound bites with Brexit related sensationalism. If they do so, not only will they be doing what they were elected to do – the real problems started way before Brexit was even an option – but they will be helping investors focus on the fundamentals instead of the hype around the contraction of the EU.
