Amareos

Ryan Shea

Thematic (Sector/Industry)

ishares msci switzerland index fund (etf) (EWL US)

ishares msci switzerland index fund (etf)

Following Brexit and Trump the collective sigh of relief that “thank goodness 2016 is nearly over” is palpable. Unfortunately, political uncertainty and its associated risks are not going to disappear any time soon. Indeed, there are major European political events looming on the near horizon.Most immediately, there is the Italian constitutional reform referendum slated for December 4th. With PM Renzi having promised to resign in the event that he fails to secure victory this has, in effect, become a confidence vote in his government.According to opinion polls published just prior to the mandated black out period, the No campaign had a commanding lead – ranging between 5-10 percentage points depending upon the poll. Even though this lead is below the number of undecideds the indication from the polls is fairly clear cut; Renzi will lose.That said, given how abysmal opinion polls have been at predicting the outcomes of political votes this year (and earlier – notably the polls were also wide of the mark in predicting the last UK general election) it is awfully tempting to go with a Yes victory purely on contrarian grounds.Our preference, of course, is to rely on the signals from crowd-sourced sentiment indicators given they accurately flagged both the UK referendum and US presidential outcomes.

Following Brexit and Trump the collective sigh of relief that “thank goodness 2016 is nearly over” is palpable. Unfortunately, political uncertainty and its associated risks are not going to disappear any time soon. Indeed, there are major European political events looming on the near horizon.Most immediately, there is the Italian constitutional reform referendum slated for December 4th. With PM Renzi having promised to resign in the event that he fails to secure victory this has, in effect, become a confidence vote in his government.According to opinion polls published just prior to the mandated black out period, the No campaign had a commanding lead – ranging between 5-10 percentage points depending upon the poll. Even though this lead is below the number of undecideds the indication from the polls is fairly clear cut; Renzi will lose.That said, given how abysmal opinion polls have been at predicting the outcomes of political votes this year (and earlier – notably the polls were also wide of the mark in predicting the last UK general election) it is awfully tempting to go with a Yes victory purely on contrarian grounds.Our preference, of course, is to rely on the signals from crowd-sourced sentiment indicators given they accurately flagged both the UK referendum and US presidential outcomes. 

Market Sentimentalist: Political Economy Redux