1. Shutdown Concerns Build Up
As the partial shutdown over funding for President Trump’s Mexico Border wall creeps into its second week, economists are beginning to look into the potential consequences.
For now, a two week shutdown over the holiday period isn’t exactly a catastrophe, but should the feud drag on towards the end on January, we may start to see the effects more clearly in the economy. Yikes!
With markets already teetering on a knife’s edge, a lasting stand-off would put a sizeable dent in consumer and investor confidence at a time when stability is desperately needed. 800,000 workers’ paychecks are currently being held ransom by Trump’s border wall demands along with federal funding for loans and tax refunds.
By the end of January, a prolonged shutdown would shave an estimated $8.7 billion off GDP and 0.2% off Q1’s economic growth figure. In addition, delaying important data releases, such as retail sales, consumer spending and GDP could cause further weakness and uncertainty across the battered markets.
Investors will be watching the epic showdown closely for signs of unity within the newly-divided House of Representatives, hoping desperately for some common ground. And rightly so! The clock is ticking.
2. Europe’s Hot Property 2019
And no, its not on the French riviera. Industrial warehouses are are on the up-and-up as online retailers, such as Amazon and other regional suppliers, clamour for ‘shed space’ to shield their business from the possibility of a no-deal Brexit.
With 87 days to go, and no deal in sight, UK companies with business in Europe and vice versa are prepping for doomsday by stockpiling inventory across the border in anticipation of any delays that may affect business.
Many retailers with regional supply-chains are already feeling the pinch, but warehousing companies with broad exposure to export-dependent countries are reaping the rewards and may offer a relative safe-haven for investors amidst the chaos.
UK based property investment & logistics companies, such as Segro, are poised to benefit extensively from their wide range of strategically-placed warehouses across Germany, France, Poland and other EU locations.
In the event that the UK crashes out of the EU, safe haven assets may be few and far between. So with the clock ticking down, a little doomsday prepping for your portfolio may be a good idea too!
Today we are watching…
1. WTI Crude Oil (#wtioil)
Oil prices fell again this morning by more than a percent even after OPEC announced the high likelihood of more supply cuts to come later in the month. Investors still foresee issues of global oversupply that could continue to push the 40% decline even lower in Q1 of 2019. However, positive signs of stabilisation towards the end of Jan/Feb could bring investors flooding back. So watch this one closely its going to get interesting!
2. Netflix (#netflx)
Netflix has risen from the ashes thanks to its record-breaking movie, Birdbox, that racked up an impressive 45 million views in its first week, sending its share price through the roof. Having suffered extensively at the hands of the October-December sell-off, Sandra Bullock’s smash hit may be the X-factor that drives investors and subscribers alike into Netflix in 2019.