Today was one of the strangest market days I have seen in a while. This morning, the odd combination of gold, the dollar, and US treasuries were soaring. Equities were down pretty hard.
Supposedly this was attributed to Brexit fears. Not one, but two new polls showed Brexit in the lead.
Then in a tragic incident, Jo Cox, a Labour candidate for Remain, was shot and stabbed to death. The Markets reversed sharply on the news.
Let’s take a look at the reversals followed by a recap of the tragic incident.
30-Year Bond Yield
S&P 500 Index
Fatal Shooting of British MP Jo Cox Leaves UK in Shock
The timing of these reversals coincides with this Financial Times report: Fatal Shooting of British MP Jo Cox Leaves UK in Shock.
Jo Cox, aged 41, a supporter of the campaign for Britain to remain in the EU, was shot and stabbed several times in her constituency town of Birstall, near Leeds in northern England, on Thursday lunchtime outside a local library where she had been meeting residents.
Her killing was condemned by politicians stunned by the violence. Both the Remain and Leave sides immediately suspended campaigning. Prime Minister David Cameron cancelled an appearance at a Remain rally in Gibraltar, saying: “It’s right that we are suspending campaigning activity in this referendum and everyone’s thoughts will be with Jo’s family and her constituents at this terrible time.”
Local media said witnesses reported that the man shouted “Britain first” during the attack, but that was unconfirmed. One witness, café owner Clarke Rothwell, later told the BBC that the attacker had shouted “Britain first” or “put Britain first”.
Former London mayor Boris Johnson, a leader of the Leave campaign, called off a battle bus tour for the Leave campaign after hearing of Ms Cox’s shooting, which he said was “absolutely horrific”.
Campaigns Suspended, Not the Vote
That alleged shouting of “Britain First” is not confirmed. And it appears the markets reacted as if the Brexit vote was suspended, as opposed to campaigns.
But once rallies like these start, they tend to last all day.
Did the attacker really shout “Britain First”? That is still in question.
Regardless, it is uncertain how this affects the Brexit vote. I have seen comments go both ways.
My instinct is that this incident, not history, could conceivably save Remain. Otherwise agnostic voters may vote out of solidarity.
It’s also possible the incident saps the energy from Remain, or voter turnout in general becomes disgusted by the whole process.
Finally, it’s possible that Remain tries to capitalize on this, and the attempt backfires.
So, we really do not know. Only polls taken after this incident will be reliable now.
Mike “Mish” Shedlock