Apparently Britain’s treaty announced on Thursday was in danger the moment it was aired around Westminster with both opponents and supporters of Brexit seeing it as unsatisfactory and not one thing or the other. The pro leave campaign sees it as Britain tied to EU rules on an ongoing basis and there followed a series of ministerial resignations and Prime Minister May being subjected to a mauling by MPs in the Houses of Commons. At the moment with a slim majority in the Commons and with opposition to the deal from Labour, The Libs, Scottish National party and lots of Eurosceptic Conservatives Mrs May’s hopes of winning parliamentary approval look slim. The question that many sceptics seem to be struggling with is “what is the alternative?”.

European stock market indices stabilised at the end of the week which was dominated by the twists and turns of the Brexit drama. The pound rallied on Friday after the dollar suffered weakness, and US Treasury yields fell as the Federal Reserve’s new vice-chairman said that US interest rates were nearing ‘neutral’ and warned that there was evidence the world economy was slowing. However, overall the pound was still down sharply over the week against both the euro and the dollar due to heightened concerns over the Brexit deal.

Elsewhere in Europe, the Italian budget was announced on Tuesday and, although overshadowed by Brexit, it could soon reappear as a cause for concern after Rome stuck to its fiscal plans which will likely result in a clash with Brussels. This may result in disciplinary proceedings and the concerns led to an increase in Italian bond yields.

Volatility in the oil markets this week provided a further reason for nervousness, particularly after Brent tumbled nearly 7% on Tuesday, which was based around fears of slowing global demand. Brent did subsequently pull back but was still down 4.5% for the week and 22% beneath the four year high struck in October.

In the US, it was the tech sector which made the headlines with US chipmaking stocks coming under pressure, driven by disappointing guidance from Nvidia and Applied Materials; in the case of the former they indicated to the market that fourth quarter sales and earnings would be weaker and cited an excess inventory of cards aimed at video gamers as a principle reason.  Semi-conductor equipment manufacturer Applied Materials dropped after saying it had paused expansion plans due to the uncertain outlook for the industry.

It is times like these that the Ravenscroft investment team takes comfort from our global approach, taking little notice of the psychological scares that litter the headlines, as we are focused on the quality of assets which we want to own for the long term. Whilst we understand volatility is not pleasant for investors to withstand, we are using this current pull back in markets as an opportunity to purchase quality assets at cheaper prices with the view that over the long term, they will not only recover, but provide capital growth.

Over short periods of time, markets can move up, down, or side to side. Over the long run however, markets tend to move higher. If investors can afford to take a longer investment time horizon then the potential effects of Brexit, trade wars, an Italian referendum or the potential re-election of Trump (be it positive or negative) will be negated, as a longer time horizon tends to allow investors the ability to ride out volatility in the markets.

We remain defensively positioned to weather any further storms that may be passing with our equity allocations at low levels relative to what is permitted and this more defensive stance reflects elevated valuations in both equities and bonds as we are not seeing a huge amount of value to be taking undue risk; particularly given the uncertainty in the macroeconomic and geo-political environment.

Away from politics, on the sporting fields there was relief at Twickenham for England who found themselves trailing a spirited and adventurous Japanese rugby side but came out eventual winners by 35 to 15, Scotland and Italy predictably lost to South African and Australia respectively, whilst Wales thrashed Tonga. The big headlines and huge credit must belong to the Irish team who beat the All Blacks to claim their first ever home victory against the team from New Zealand. The result led the All Blacks coach Steve Hansen to claim that the Irish are now World Cup favourites after their victory in Dublin.

And the final word goes to England who staged a superb late comeback to beat Croatia at Wembley to reach the finals of the inaugural UEFA Nations League although the competition is so complex that many are still baffled as to what significance this result really has.