The FTSE advantage? Whattaya nuts? The Cassandra’s told us that in the wake of the UK Brexit decision to leave the European Union there were going to be major, indeed very major, problems for the United Kingdom. In fact, in the wake of the strong Remain votes in Scotland and Northern Ireland, there was a looming issue over whether there was going to be "United" Kingdom left at all. Along with the extreme extrapolations of the overwrought chattering classes regarding the UK, there was the concern for the entire world economy on the significant weakening of international trade that could lead to a global recession!

Slow down just a minute. That more circumspect psychology also seems to be the communication from the markets on the sizable equities recovery from the follow through selling Monday in the wake of Friday’s debacle. As we noted in last Friday’s Brexit and Beyond, “…there is roughly a two-year transition period during which all of the particulars of the UK-EU divorce will be negotiated. We have already heard from heads of global financial firms and others that there will indeed be no immediate UK job losses or other changes. They have all also said they will maintain a strong UK presence.”

And on the relatively stronger FTSE performance, we don’t know if it was something the markets just sensed or there was some subtle hint. Yet yesterday morning (US time) saw the ultimate extension of the subdued central bank reactions: Bank of England Governor Carney’s assurance  that the likely future weight on the UK economy would be "anticipated" and some further accommodation will be provided by the Bank.

Was the anticipation of such a move the reason the FTSE had already significantly outperformed the other non-US equity markets? Or was it a combination of other factors (possibly along with some sense the Bank of England would move) that has driven the FTSE strength? Hmmm.