Investors have grown ever more optimistic about the future of capital markets, despite geopolitical turmoil from the Britain’s decision to leave the EU and France’s tumultuous election. Since Sunday’s election in France where Macron the centrist emerged victorious over his far-right rival Le Pen, market volatility has begun to quell as thoughts of a major market sell-off have all but died amidst the relatively neutral minded Macron showing support for France in the EU. As it stands the CBOE Volatility Index, VIX is at its lowest level since 1993, while both the S&P 500 and Nasdaq composites hit new highs Monday.
Barclay’s net profit fell by more than 50% in the first quarter of 2017, on account of massive costs attributed to the shedding of its African business and less than stellar performance from its investment banking services. This loss comes amidst weak trading revenues as a result of diminished volatility within markets that had collapsed trading spreads. In addition, market uncertainty within the UK coupled with Theresa May’s initiatives to remove the UK from the EU official have led to a decline in the British Pound and fixed income yields.
Trump’s tax proposals show signs of creating massive deductions for both middle and lower income Americans, by doubling the standard deductions on dependants and protecting write-offs for both homeownership and charitable gifts. This, in turn, should allow more Americans to diminish their tax bracket and retain more of their earnings, enabling them to spend far more money on goods and services, which should bolster the nation’s economy.