That description certainly applies to three of the biggest political developments this year, starting with UK’s Brexit vote this summer.
Recall that not many pundits predicted the “leave” vote would win. Fewer still said that stocks would surge shortly after that news.
Before the vote, JR Crooks recommended that you “Don’t Get Crossed Up by Brexit.” He predicted that risk appetite would catch a post-vote bid.
And that’s exactly what happened.
The surprise outcome then rippled across the Pond in the fall. That’s, of course, when America elected Donald Trump as her 45th president. Also recall that most pundits thought that a Trump win would bring on a “yuge” sell-off in stocks, a surge in bonds and a shine in gold.
Well, the opposite happened.
Then yesterday, Italians voted “no” to Constitutional changes that would have altered a big chunk of that country’s governance. Most notably, the composition of Parliament and the way laws are passed.
Unlike Brexit or, to some extent, the Trump victory, the “no” vote in Italy was expected. What wasn’t as anticipated was the subsequent resignation of Italian Prime Minister Matteo Renzi.
What was even less expected? The virtual shrugging off of the news by the U.S. and global financial markets.
Stocks here at home opened up firmly in positive territory Monday morning. Then they quickly rose to all-time highs.
In Europe, stocks also climbed. You can see below that the Vanguard FTSE Europe ETF (NYSE:VGK) has rallied strongly since mid-November, without so much as a hiccup. Stocks are essentially shrugging off news that has the potential to open the floodgates to what’s being called an “Ita-leave” — i.e., Italy voting to leave the European Union the same way the UK did.
If there is a vote at some point for just that, and if it passes, then that could be the move that puts the nail in the coffin of the European Union …
And that could very well be a major negative for equity markets around the globe.
Of course, the market may also look at that potential development and once again shrug off the news — the way it’s already done so many times this year.
Whatever happens here, you can bet all eyes — including ours — will be watching intently.
This article is brought to you courtesy of Uncommon Wisdom Daily.