After the initial blow of Brexit, markets breathed a slight relief by the end of last week with both U.S. and global markets bouncing back from its initial self-off.
The technology-heavy Nasdaq Composite Index capped off a four-day rally on Friday, closing up 19.90 points or 0.4% at 4,862.57 on trading volumes of around 1.73 billion. After bottoming at four-month lows on Monday, the Nasdaq rebounded 5.8% over the next four days, outpacing the other major US equity gauges.
Advancing stocks led decliners by a ratio of 1.68 to 1. In total, 1,813 Nasdaq shares finished higher, compared to 1,076 that reported lower. A total of 77 stocks listed on the Nasdaq Stock Exchange reached a 52 week high versus only ten that reached a one-year low.
Wall Street Rallies
There were sharp gains throughout Wall Street last week. The large-cap S&P 500 Index closed up over 3% last week, reaching 2,102.95. The Dow Jones Industrial Average edged up nearly 20 points on Friday following three consecutive 200-point gains and the blue chip index closed at 17,943.37.
Analysts believe it will difficult for markets to reach much higher especially for the U.S. equity gauges. The most recent movements in gold and other precious metals point to concern by investors about Britain’s future negotiations with the EU and a possible drawn out process of establishing a new trade relationship with the bloc which could create additional uncertainty in the financial markets.
The process of exiting the EU could take up to two years. The UK must invoke Article 50 of the EU Treaty before the official devolution process begins and only when triggered, does the clock start ticking for negotiating new trade terms. Several EU members have reportedly indicated they want Britain out of the bloc sooner rather than later but Brexit MPs in London appear to be in no rush to begin the process.