sp'daily5
VIX'daily3
Summary
US equities opened moderately weak, partly weighed by a (moderate) earnings miss from GS, but more so, the news of a UK election. An opening reversal failed to hold in early morning, with another wave lower to sp'2334. From there, a rather standard (if choppy) latter day recovery.
Volatility was itself choppy, and with a moderate equity recovery in the afternoon, even turned negative into the close.
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Meanwhile, in the land of yours truly...
PM/Conservative leader May has called for an election. I feel inclined to reference Palpatine...
Seriously, its a very shrewd political move. The main opposition party 'Labour' (the UK version of the democrats), is deeply fractured, and are trailing in the polls by around 20pts.
May* is seizing the opportunity to greatly increase her parliamentary majority, and safely 'bank' a further five years of power to summer 2022. Unlike the French elections, there is near zero doubt on the outcome of the June 8th UK election.
Naturally - even though the result is clear, the UK equity/capital market will be somewhat clouded until the election is out of the way.
A brief look at the UK equity market....
FTSE 100, monthly, 20yr
Last year's break above 7k was massively decisive.That is now core support, and should hold into the June election. If you backwards extrapolate, you have to start from 10k before the next major decline can begin, and that is clearly not viable any time before late spring 2018.
If you believe that, you should also recognise there are indirect implications for the US market.
Goodnight from London
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*I'm not suggesting May is on the level of a Sith Lord, but her voting pattern across the last decade is pretty dark sided.