Liv-ex Justin Gibbs: “LX50 up 10 % year to date: fine wine steady ship in troubled waters”

Peter ShakeshaftToday seems a calmer day on the surface of things, Sterling and the FTSE have both enjoyed small upturns this morning, although the FTSE 250, which is more UK centric index than the FTSE 100, has seen less recovery. UK shares have however regained some ground and this could be due to the delay in exercising Article 50 having some calming affect on the markets. So there is a little more optimism at this stage but ultimately uncertainty will continue to create problems for UK investors for the foreseeable future.

Which stocks are most vulnerable? The domestic financial sector such as Lloyds, Prudential and Standard Life are all feeling it and house-building shares are also in the firing line. Nobody knows yet what real impact this is all going to have on jobs, the economy and consumer confidence but it is worth noting that Vodafone has announced today that the company may relocate its HQ away from the UK subject to the Brexit negotiations.

The UK political landscape is undergoing tectonic shifts, reflected in Moody’s downgrade yesterday. As Corbyn clings on, the candidates for leadership in both major parties are stepping forward.  Work and Pensions Secretary, Stephen Crabb’s opening pitch to the nation observes the ‘mind-boggling’ complexities of the work ahead in regards to restructuring our future relationship with the EU.

No doubt we have a long, long way to go and market uncertainty is the only certainty! Interestingly the fine wine exchange, Liv-ex, reported this morning to trade members that investors looking for safe havens have another real option to Gold with fine wine outperforming European equities over the last two years.

Liv-ex Director Justin Gibbs comments ”The Liv-ex 50*(and Gold) are now outperforming European equities on six month, one year and two year views. Indeed the LX50 is up 10% year to date. Troubled waters perhaps, but fine wine looks a steady ship.”

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* The Liv-ex Fine Wine 50 Index tracks the daily price movement of the most heavily traded commodities in the fine wine market – the ten most recent vintages (excluding En Primeur, currently 2003-2012) of the Bordeaux First Growths.