May’s Mixed Messages

Just nine months after British Prime Minister David Cameron resigned, following his failed “gamble” on calling a referendum on EU membership, his successor Teresa May announced a snap election decision this week, to be held on the 8th June 2017, mercifully only 7 short-weeks from today and despite her denying any plans for an early election before 2020.

So what’s changed her mind?

She says that if left towards the 2020 deadline it would weaken the UK’s bargaining position with the EU over Brexit and there may be some truth in this. However, it’s far more likely that TM is giving and receiving mixed messages that the timing is perfect, including a huge advantage in the opinion polls against the Labour party, put at 48% V 24%, with the chance of increasing the Conservatives majority in parliament; Economic growth revised higher than any other country in the IMF’s latest projections released this week and a perception that the country is behind her stance over Brexit.

All of this is pure conjecture of course, as the polls have been anything but accurate over the past few years, the IMF is notoriously bad at any forecasting other than telling you what happened yesterday whilst one should remember that aside of the fact that 48% of the Brexit referendum voters voted to remain, the leavers and the remainers are battle fatigued from last June’s lead-up to it and the tortuous path to Article 50 since.

A reminder of the Socionomic messages

You may wish to re-read the February/March 2016 overviews, “Brexit, Socionomically Thinking,” and “Trump Card” which were both pretty good guides to the outcome of those two events. A common denominator within them was the following observation:

 “The collective social mood will decide on the UK referendum and on the US Presidential election, as indicated by the respective country’s stock-index being the best “barometer” of the country’s collective social mood and that  mood governs events not the other way round.”

A look at the 3-year weekly data chart of the FTSE 100 index, the UK’s largest and finest companies, provides two clear messages:

• The UK social mood “Barometer” had already changed course, from up to down, a full two-weeks before the PM’s announcement.

• A Fibonacci re-tracement guide, based on the post February 2016 rise, suggests corrective target levels of 6699 and 6239 for the FTSE, a further fall of between 6% and 13% from yesterday’s 7114 closing level.

Whilst a lot can happen between now and early June of course the current “collective social mood” message is suggesting a mixed result for May, perhaps a “Hung Government?”