Broader financial news

Top headlines to watch over the long-term
These headlines may not have moved markets yesterday, but they describe general trends in financial markets or events that may impact the longer-term. Due to the longer-term focus, this section may not be updated daily.

French election shaken by surge in support for far-left candidateTheGuardian
With just days to go until the first round of French elections on April 23, the independent centrist Emmanuel Macron and the far-right leader Marine Le Pen are the favorites to face off into the next round. From the perspective of the financial markets, Macron, a former economy minister and investment banker who is pro-immigration and pro-European, would likely represent the most stable choice for financial markets since he is unlikely to advocate for withdrawal from the EU. However, in recent weeks the prospect of Le Pen winning the election has spooked markets as she is both anti-immigration and anti-EU, calling herself Madame ‘Frexit’ and promising to call referendums over France’s membership in the EU.

In recent days, however, a recent surge in the polls by Jean-Luc Melenchon, the far-left candidate has created some new drama to keep an eye on. Similar to Le Pen, Melenchon advocates for a “new role” for France in the EU. However, economically, some of Melenchon’s policies include reducing the number of hours in the work week, lowering the retirement age and taxing earnings above €33,000 a month at 100%.

U.S. stock funds’ weekly outflow largest in 2017
– Reuters

Investors pulled nearly $12 billion from stock funds during the week leading up to April 5, with $7 billion being taken out of the S&P 500 ETF (ticker: SPY) which tracks the S&P 500. While this would normally portray a negative sign for stocks, the majority of the withdrawals came from retail investors (people like me and you, rather than institutions) and near-term stock market performance can often act inversely to retail flows. In fact, many up markets have started when retail stock outflows were hitting record highs, and inversely many down markets have started when inflows were seen at very high levels. So while there is no hard and fast rule to this, seeing large outflows is not necessarily a bad sign, and it may actually signal that the multi-month rally may not be over just yet.

PM May triggers ‘historic’ Brexit
– Reuters

On March 29, Prime Minister Theresa May officially triggered Article 50 of the EU’s Lisbon Treaty and notified EU President Donald Tusk that Britain would be leaving the European Union. This follows the June 2016 referendum vote in which 51.9% of British citizens voted to leave the EU. The Prime Minister now has 2 years to negotiate the terms of Brexit before it comes into effect in March 2019. May’s challenge will be to negotiate with the other 27 EU states on issues such as trade, security, and finance, while also managing renewed calls from Scotland nationals for their own independence referendum.