Monday has proven to be a good day for the global markets as stocks continue to rise throughout the day. After the UK referendum in June global stock exchanges felt a cold chill as the market plunged. The uncertainty of England’s future caused quite a shakeup for markets throughout the entire world. On July 11, it has been announced that the UK has settled on their PM following the resignation of the former Prime Minister, David Cameron, after the majority of the nation voted ‘leave’ in the EU referendum.
Theresa May has been confirmed as the new Prime Minister of the United Kingdom – in a process that has been cut short by almost 3 months. May was preparing for her campaign to last until the middle of September, however her opponent dropped out of the race. The market benefits by having the stability of the UK and avoiding a prolonged election period. David Cameron is expected to leave office within the next two and a half days. Cameron endorsed May earlier today in his address to the nation. The UK now has 9 extra weeks to reach certainty and stability, and the market will respond positively to these new developments. The British pound has risen to $1.29 against the US Dollar, the second highest jump since the results of the referendum.
Global markets have been positively affected by the election in Japan as well. Tokyo’s Nikkei Index rose 4 percent today, the greatest amount of growth since early February. The jump in the stocks is due to Prime Minister Shinzo Abe’s landslide victory in the federal election. After Abe won the election he announced he would add further fiscal stimulus to the market. He intends to bring the Japanese economy back to life as well as increasing inflation. The Yen has appreciated since Friday even with the country’s bankers guiding the interest rate into the negative. The landslide election victory means Japan will continue to tread above water in the global market.
Shares on Wall Street have also risen today despite continued worried over market volatility and slowing growth. In the opening minutes of the market bell the Dow Jones grew 87.85 points. Investors welcomed stronger than expected US job figures on Friday and the gains early Monday a results of these figures.
A third contributor to the market rise Monday July 11 is due to the Deutsche/LSE merger. Deutsche Bank has lowered the approval threshold for its merger with the London Stock Exchange, from 75% to 60% of its shareholders. As a result, LSE has until July 26 to accept. If it goes through, the merger will create the world’s biggest exchange by revenue forecast to be $5.19 billion USD this year.
It is being reported that stocks could break into record highs throughout the week ahead.