Tag: finance

With Vicente Fox whining that Mexico "won't pay for the f**king wall," and Pena Nieto confirming "Mexico does not believe in walls," President Trump just double-tweeted exactly how our southern border 'friends' will end up paying for the wall or else!…

The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers…

— Donald J. Trump (@realDonaldTrump) January 26, 2017

of jobs and companies lost. If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting.

— Donald J. Trump (@realDonaldTrump) January 26, 2017

Did Trump just give Pena Nieto an out for next week's meeting? We suspect not as the angry tweet seems to have cornered Pena Nieto into a decision.

The tweet comes after Mexico’s president on Wednesday once again declared that “Mexico will not pay for any wall” but stopped short of cancelling a visit to Washington after Donald Trump signed executive orders that include building the border barrier.

Enrique Peña Nieto reiterated that Mexico would not put a single peso towards the new US president’s signature project. In a televised address he said: “I regret and reject the decision of the US to build the wall.”

“I have said time and time again, Mexico will not pay for any wall,” Peña Nieto told the nation in his short video statement on Wednesday night.

“Mexico reaffirms its friendship with the people of the United States and its willingness to reach agreements with its government.”

He left up in the air the question of the 31 January meeting with Trump in the White House – saying his decision would depend on an evaluation by a team already in Washington and officials at home.

While the costs of "building the wall" are largely unknown, estimates have been made by both political parties…

You will find more statistics at Statista

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Great news – Q4 GDP just got another technical boost as advance wholesale inventory rebuilding surged by 1.0% MoM and 2.60% YoY in Dec 2016 (the biggest surge since Oct 2015), to $608.3 billion.

The YoY surge was dominated by a 7.7% spike in motor vehicle inventories but perhaps worryingly December saw auto inventories decline 1.0% MoM.

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As part of his blitz of latest executive orders, which as reported yesterday would institute sweeping changes to U.S. refugee and immigration policies including a ban on people from countries in the Middle East and North Africa deemed as a “terror risk”, a separate order also lays the groundwork for an escalation of U.S. military involvement in Syria by directing the Pentagon and the State Department to craft a plan to create safe zones for civilians fleeing the conflict there.

Trump said on Wednesday he “will absolutely do safe zones in Syria” for refugees fleeing violence. According to a document seen by Reuters, Trump is expected to order the Pentagon and the State Department in the coming days to come up with a plan for the zones.

Such safe zones could provide an alternative to admitting refugees to the U.S. according to Trump, but would also force greater US military deployment to the region.

According to the WSJ, the safe-zone proposal represents a significant policy reversal from the administration of Barack Obama, who long resisted pressure for such an approach from Congress and U.S. allies in the Middle East because he believed it would draw the U.S. too deeply into another war.

Establishing safe zones in Syria would mark an escalation in America’s military involvement there. In addition to the initial military buildup that likely would be needed to create the zones, ground troops and additional air power will be needed to protect them, military officials have said. Such zones would also put U.S.-allied forces in dangerous proximity to foreign troops, including forces from Russia and the regime of Syrian President Bashar al-Assad.

Confirming that Trump’s proposal plays into the hands of the party that has been mostly responsible for the relentless proxy war in Syria over the past 6 years, Qatar, a backer of rebels fighting Syrian President Bashar al-Assad, welcomed Trump’s pledge to order safe zones in Syria, a foreign ministry official was quoted as saying by state news agency QNA on Thursday.

Qatar’s foreign ministry director of information, Ahmed al-Rumaihi, said in a statement that Qatar welcomed Trump’s comments on Wednesday and “emphasized the need to provide safe havens in Syria and to impose no-fly zones to ensure the safety of civilians.” Rumaihi said Qatar hoped recent negotiations in Kazakhstan would help maintain a shaky truce between Syria’s warring parties and that an effective monitoring mechanism would be needed to create conditions for proposed peace talks in Geneva.

As a reminder, gas-rich Qatar works alongside Saudi Arabia, Turkey and Western nations to back Syrian rebels in a military aid program overseen by the CIA that provides moderate groups with arms and training. A natgas pipeline project connecting Qatar to Europe has been often cited as the main reason for the relentless attempts to destabilize and overthrow the Assad regime, and to impose a puppet regime that would be aggreable to the project, one which would significantly reduce Europe’s reliance on Russian gas exports.

Meanwhile, Trump’s other executive order curbing immigration from the region was met with concern by students, family members and governments who worried whether recently granted visit and study visas would remain valid and how they would see their relatives resettled in America. Trump’s order banning entry to the U.S. by people who come from countries deemed terrorism risks was expected to include Iraq, Iran, Syria, Yemen, Somalia, Sudan and Libya. It is a modification of a ban he promoted during the campaign regarding Muslims entering the U.S.

“What a terrible move!” Abdi Aynte, Somalia’s international cooperation minister wrote on social media.

 

In the 2016 fiscal year, 3,660 immigration visas—meant for people who are planning to move permanently to the U.S.—were issued to Iraqis, according to the State Department. Citizens of Iran, a nation considered an adversary of the U.S., were granted more than twice that number.

 

The vast majority of Iraqi immigration visas went to so-called Special Immigrants, classified by the department as those people who had worked with the U.S. government or military. Extremists in Iraq have put bounties on those who helped Americans.

Since Trump became president last Friday, the U.S. has admitted about 1,100 refugees, including 200 from Syria. Trump’s latest actions would end the current allowance of Syrian refugees into the U.S. and halt all visas to Syrians until a later time.

Trump also plans to suspend America’s entire refugee program for 120 days while officials determine which countries pose the least security risk and to implement new tests of those applying for visas. Ultimately, Mr. Trump plans to reduce the cap for refugees into the U.S. from 110,000, as set by Mr. Obama, to 50,000 for the 2017 fiscal year. His moves would suspend issuing visas to countries where the administration determines adequate screening can’t occur.

The new policy would ban people who engage “in bigotry, honor killings, violence against women, or who persecute other religions, or who oppress members of one race, one gender, or sexual orientation,” according to a summary of the plan. It also prioritizes the admission of refugees who claim religious persecution.

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While the non-seasonally-adjusted continuing claims data follows its norm of soaring post-Christmas, both the initial and continuing claims (adjusted) data has bee trending (albeit noisily) higher since troughing at the moment of the election…

 

 

Being the most real-time index of activity (and not a survey of hope), one has to wonder why this is deteriorating when The Fed’s National Acitivty Index says everything is awesome…

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Submitted by Mike Shedlock via MishTalk.com,

Professor Ted Malloch, Trump’s expected ambassador to the EU says “The one thing I would so in 2017 is short the euro.”

 

Partial Transcript

“I am not certain there will be a European Union in which to have negotiations… The one thing I would do in 2017 is short the euro. I think it is a currency that is not only in demise, but has a real problem and could in fact collapse in the coming year or year and a half.”

It nothing else, Trump is sure to provide fodder for media discussion for four full years.

That aside, it is refreshing to hear such discussions. The breakup of the Eurozone or EU is a very distinct possibility.

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After over a month of foreplay, Dow 20,000 is in the rearview mirror.

And yet in retrospect, it didn’t take long. Deutsche Bank’s Jim Reid looks at how Dow numbers were first achieved and how long it took between each 1000 increment. Firstly the Dow only hit 1000 for the first time in January 1987. 5000 was reached in November 1995, 10000 in December 2003 and 15000 in May 2013. This is the quickest ever between round number thousand point increments as it only took 64 calendar days to go from 19000 to 20000.

Of course, as the number gets bigger the % gains are smaller and therefore more achievable so this number is a little meaningless. Which is why DB also shows the graph of this and also one showing how long each 10% increase took working back from today’s 20000 level. The data goes back to 1900. The average length of time has been 1.9 years. On 7 occasions it’s taken more than 4 years and we’ve annotated these on the graph. Working backwards these were the 4.7 years to April 2011, 5.5 years to August 2003, 18.1 years to October 1982, 4.4 years to March 1950, 18 years to July 1942, 8.8 years to June 1924 and 10 years to September 2015.

And while the Dow 20,000 is nothing more than a “law of round numbers” milestone, it has bigger implications. What does it mean to professional investors, Bloomberg asked overnight, and found that it was “mostly a call for caution.“

The Dow Jones Industrial Average’s taking out of the latest round-number milestone pushed its gain since March 2009 past 200 percent. It also conjured memories of the damage done 17 years ago when the blue-chip index soared past 10,000, a siren song for individual investors seeking to jump into the dot-com euphoria.

Another sign of caution:  strategists and money managers surveyed Wednesday by Bloomberg warned about chasing performance this time, citing concerns from stretched valuations to uncertainty over Donald Trump’s policies: history may be on their side. Data on market returns after 1,000-point milestones in the Dow show that while stocks tend to rise more than the historic average a month later, the performance over six- and 12-month periods trailed.

Here’s a sampling of what professional money managers are saying:

• “Once retail comes in, that’s the time to get out.’’ — Weeden & Co. strategist Michael Purves

20K is more psychologically important for retail investors, who have not necessarily participated in the big rally in the last few years. Institutions would be looking at it with a potential warning sign down the road, particularly if we don’t get any follow-through on earnings momentum. Once retail comes in, that’s the time to get out. That’s the thought process that many intuitions will be considering.

• “I would sell it if the Dow were a stock” — Charles De Vaulx, chief investment officer at International Value Advisers

The confidence level after Donald Trump’s election has skyrocketed. When confidence shifts so abruptly one way, I always worry it could shift the other way as rapidly. The outlook for the U.S. economy may be brighter, but the issue we have is valuation. I would sell it if the Dow were a stock, and I would want to buy it at 15 to 20 percent lower. I’m not saying I expect the market to go down. My conundrum is investors are not paid enough for risk.

• “Hedge on any potential downdraft in the stock market.” — Rich Weiss, Los Angeles-based senior portfolio manager at American Century Investments

I don’t think anyone would disagree that our new president and new administration are outsiders, they’re disruptors. By definition, they’re going to make changes, some significant changes. One would expect more volatility, both positive and negative, to come in the coming months. That’s a real conundrum, one that we’ve taken advantage of by purchasing long volatility not for speculative reason, but it provides a nice hedge on any potential downdraft in the stock market.

• “Like crossing state lines with kids” — Laszlo Birinyi, the president of Birinyi Associates

Historically somebody would have said days like this and numbers like this are like crossing state lines with kids. They get so excited for five minutes and then they ask, where is the next McDonald’s? I would not consider it an indicator of any real substance or significance. You’re starting to see some more participation from some very significant names, which I think is probably as important as the number itself.

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Trump took to Twitter on Thursday morning, where in his first tweet he lashed out at Chelsea Manning, calling her an “ungrateful traitor” who should have never been released from prison.

“Ungrateful TRAITOR Chelsea Manning, who should never have been released from prison, is now calling President Obama a weak leader. Terrible!” he tweeted.

Ungrateful TRAITOR Chelsea Manning, who should never have been released from prison, is now calling President Obama a weak leader. Terrible!

— Donald J. Trump (@realDonaldTrump) January 26, 2017

The reaction was prompted by Manning’s first column since former President Obama commuted her sentence for leaking classified documents, in which Manning said Obama had “few permanent accomplishments.”

“This vulnerable legacy should remind us that what we really need is a strong and unapologetic progressive to lead us. What we need as well is a relentless grassroots movement to hold that leadership accountable,” she wrote in The Guardian. “The one simple lesson to draw from President Obama’s legacy: do not start off with a compromise. They won’t meet you in the middle.”

As one of his last acts, Obama commuted the 35-year sentence of the former Army soldier, who was born Bradley Manning and began publicly identifying as a woman in 2013. The outgoing president said Manning had paid her debt to society.

“I feel very comfortable that justice has been served,” Obama said at his last news conference.

“Chelsea Manning has served a tough prison sentence,” he said. “So the notion that the average person who was thinking about disclosing vital classified information would think that this is going unpunished I don’t think would get that impression from the sentence that Chelsea Manning has served.” 

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• Trump heads to Philly to charm congressional Republicans (Politico)
• Trump Set to Lay Out Plans for Safe Zones Inside Syria (WSJ)
• Trump Wants to Build a Wall. Finding Workers Won’t Be Easy (BBG)
• Sanctuary cities face huge cuts by Trump policy (Reuters)
• Trump Faces Criticism Over Prospect of Enhanced Interrogation Techniques (WSJ)
• U.K. Commons to Complete Article 50 Bill Debate in Two Weeks (BBG)
• Blacklisting Muslim Brotherhood Carries Risks (WSJ)
• Six shot during vigil for gunshot victim in Chicago (Reuters)
• China Said to Order Banks to Curb New Loans in First Quarter (BBG)
• U.K. Brexit Boom Still Sees Economy Plagued by Old Problems (BBG)
• Dutch Regulator Accidentally Posts Soros’s Short Positions (BBG)
• In Trump era, Democrats and Republicans switch sides on states’ rights (Reuters)
• World Leaders Seek Cues From May’s Visit to Trump (BBG)
• TransCanada has not yet broached Keystone XL with shippers (Reuters)
• RBS Gains After $3.8 Billion Charge Tied to U.S. Mortgage Probe (BBG)
• Ford Motor quarterly profit matches Street expectations (Reuters)
• Apple’s IPhone Sales Set to Rebound, But for How Long? (BBG)
• Fiat Chrysler says to nearly halve net debt in 2017 (Reuters)
• Philippines says U.S. military to upgrade bases, defense deal intact (Reuters)

Overnight Media Digest

WSJ

– Technology veteran Hugo Barra will join Facebook Inc to run its virtual-reality efforts, including the Oculus VR team, Chief Executive Mark Zuckerberg said late Wednesday. http://on.wsj.com/2jruMmy

– Tribune Media Co Chief Executive Officer Peter Liguori is resigning after four years at the helm, during which time he slimmed the media company down to focus more on its broadcast and cable-programming holdings. http://on.wsj.com/2jrNLNJ

– Canada’s AltaGas Ltd reached a $6.4 billion deal to buy WGL Holdings Inc, Washington D.C.’s natural-gas utility, more than tripling its customer base. http://on.wsj.com/2jrxpEB

– A South Korean government fine overshadowed improved operating performance for Qualcomm Inc in the latest quarter, underscoring concerns the most profitable part of the chip company’s business is at risk from international legal assaults by regulators and customers. http://on.wsj.com/2jrvxvU

– Facebook Inc is overhauling its “trending topics” box, part of its effort to curb fake news and expose users to a broader range of information. http://on.wsj.com/2jry09j

 

FT

British manufacturers are the most bullish about export prospects for the year ahead since the spring of 2014, partly because the fall in the value of sterling following last year’s Brexit vote has given them a competitive edge, a survey by the CBI business lobby group showed on Wednesday.

Royal Bank of Scotland Group Plc is preparing to announce on Thursday that it has provisioned about $4 billion to cover a looming penalty from U.S. authorities for mis-selling toxic mortgage securities, according to a banker familiar with the plans.

Yorkshire Building Society Group said it is closing 48 branches, including all 28 branches under its Norwich & Peterborough moniker, because of an “increasing desire among customers to transact digitally”.

 

NYT

– President Donald Trump on Wednesday began a sweeping crackdown on illegal immigration, ordering the immediate construction of a border wall with Mexico and aggressive efforts to find and deport unauthorized immigrants. http://nyti.ms/2jTWeYC

– Goldman Sachs Group Inc has rewarded its departing president, Gary Cohn, with expedited access to cash and stock payments valued at nearly $300 million, and in doing so has tacitly encouraged another of its executives to accept an influential role in Washington. http://nyti.ms/2jTUNcR

– The revival of cross-border oil pipeline project by the President Donald Trump is likely to complicate a delicate balancing act Canadian Prime Minister Justin Trudeau has been trying to keep up. Trudeau has long maintained that Canada needs to develop its energy industry, but he also stands for aggressively cutting the country’s carbon emissions. http://nyti.ms/2jTV7Ie

– Google and Facebook Inc have been taking steps to curb the number of false news articles propagated across their sites. On Wednesday, the Silicon Valley companies showed that they were still in the early stages of their battle to limit misinformation online. http://nyti.ms/2jTZt2d

– President Enrique Pena Nieto reiterated his commitment to protect the interests of Mexico and the Mexican people, and chided the move in Washington to continue with the wall, in a video message delivered over Twitter. He is scheduled to visit the White House on Tuesday. http://nyti.ms/2jTSoyv

– At least six journalists were charged with felony rioting after they were arrested while covering the violent protests that took place just blocks from President Donald Trump’s inauguration parade in Washington on Friday, according to police reports and court documents. http://nyti.ms/2jTStlN

 

Canada

GLOBE AND MAIL

** AltaGas Ltd is buying WGL Holdings Inc for about $4.5 billion in the latest major acquisition of a U.S. energy infrastructure company by a Canadian rival. https://tgam.ca/2kn5hRG

** TransCanada Corp Chief Executive Russ Girling said the Calgary-based firm is working furiously to resubmit the Keystone XL pipeline application after U.S. President Donald’s Trump directive to revive the project. https://tgam.ca/2kmYDe5

** British Columbia Investment Management Corp has entered into an agreement to sell SilverBirch Hotels & Resorts, including its 26 hotel assets and management operations, to Leadon Investment Inc, a private investor group with ties to Hong Kong. https://tgam.ca/2kwiEhK

NATIONAL POST

** BlackBerry Ltd revealed on Twitter that the long-awaited keyboard phone will be released at Mobile World Congress in Barcelona on Feb. 25. http://bit.ly/2kmXPFZ

** The Canadian subsidiary of BlackRock Inc has partnered with Toronto investment firm Dynamic Funds to launch a new suite of five actively managed exchange-traded funds, breaking new ground in Canada for the world’s largest asset manager. http://bit.ly/2kmYDel

** An Ontario judge has refused to add another of Chevron Corp’s Canadian subsidiaries to an enforcement action launched by plaintiffs from Ecuador. http://bit.ly/2kmXCTd

 

Britain

The Times

* Nathan Bostock, chief executive of Santander UK, said the Spanish-owned lender was taking a “cautious” approach to unsecured lending as he pointed to the very low rates of interest now offered by some banks. http://bit.ly/2jyP6zY

* Roland Junck, the former chief executive of European giant Arcelor Mittal, who is executive chairman of the Scunthorpe plant and associated operations, said that the business was looking at a turnaround of at least 200 million pounds ($252.64 million) in its fortunes under new management. http://bit.ly/2jyMIJA

The Guardian

* A 400 million pound skyscraper, 1 Leadenhall, has been given the green light by City of London planners and will be built next to the historic Leadenhall Market, which featured in the Harry Potter films. http://bit.ly/2jyUX8d

* Global demand for oil will still be growing in 2035 even with an enormous growth in electric cars in the next two decades, with numbers on the road rising from 1 million to 100 million, BP has predicted. http://bit.ly/2jyVkjm

The Telegraph

* BT is being targeted by the shareholder litigation specialists behind massive damages claims against Tesco and Volkswagen, after nearly 8 billion pounds was wiped off the telecoms giant’s stock market valuation by an accounting scandal and contract slump. Bentham Europe, which provides funding for out-of-pocket investors to sue companies, has opened talks with BT shareholders in the last 24 hours. http://bit.ly/2jyQZwr

* The single currency is failing to bring its economies closer together, with the strong core nations pulling ever further ahead of the weak periphery – leaving the eurozone as a whole set for years of stagnation and political crises, according to analysts at credit ratings agency Moody’s. http://bit.ly/2jz5Fvt

Sky News

* The state-backed Royal Bank of Scotland is to announce within days that it is taking another multibillion pound charge for mis-selling mortgage-backed securities — a move that will catapult it to one of its biggest losses since the 2008 financial crisis, according to Sky News. http://bit.ly/2jy4egV

* The Norwich and Peterborough building society is to close 100,000 current accounts under a shake-up that places hundreds of jobs at risk. http://bit.ly/2jyMoKz

The Independent

* Yoshiko Shinohara, the 82-year-old founder of multinational temporary work agency Temp Holdings, has become Japan’s first self-made female billionaire. http://ind.pn/2jyG71A

* German utility E.ON, which owns billions of euros worth of wind parks in the United States, said global efforts to tackle climate change were suffering serious setbacks, singling out the election of Donald Trump as a key obstacle. http://ind.pn/2jyZ58a

 

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Some early morning thoughts from JPM’s Adam Crisafulli

Market update – the narrative is still focused on growth/earnings and politics and there was plenty of news on both subjects overnight. The GOP retreat kicked off Wed night in Philadelphia and the Republican leadership outlined its agenda for the next 200 days – ACA repeal/replace and tax reform will be priorities (not infrastructure spending). Also it’s important to make a distinction between the House and Senate – Ryan will have an easier pathway towards passing legislation through the House than McConnell will in the Senate (Ryan can easily move ACA repeal/replace and his tax blueprint while McConnell won’t have nearly as much flexibility in the Senate). It remains the case that investors aren’t paying enough attention to the logistical, ideological, and fiscal constraints facing Trump/Ryan/McConnell as they look to move the agenda through Congress (and there still doesn’t seem to be enough appreciation for how enormously contentious and complicated healthcare repeal/replace will wind up being). Trump is due to address the GOP retreat Thurs 1/26 around midday. On the earnings front results Wed night/Thurs morning were generally positive and tech in particular is having a very solid season.

US macro update – the gap between expectations/enthusiasm and reality is large (and seems to be growing by the day) but 1) markets may not “care” until the end of the summer (i.e. investors may give the new WH the benefit of the doubt until Aug or Sept) and 2) the tape may not really “need” material action from Washington (the nominal growth improvement predated 11/8 by several months and if the present eco/earnings trends can persist the SPX should be able to do ~$127-130 for ’17 and ~$135-137 for ’18 w/o any of the Trump/Ryan “Big 3”).

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Who can forget the “doom and gloom” warnings about the fate of the UK should Brexit win? Well, according to the latest confirmation received on Thursday, they were not only wrong but with an ironic twist because according to the Office for National Statistics, the UK economy grew by 0.6% in the Q4 of 2016, more than the 0.5% consensus estimate, and – more importantly – grew by 2% for all of 2016, making the UK the fastest growing economy among the G7 in the past year.

On an annualized basis, the U.K. economy grew 2.4 percent in the fourth quarter. The U.S. is forecast to have expanded 2.2 percent in the period, down from 3.5 percent in the three months through September.

The fourth-quarter GDP estimate showed that services surged 0.8 percent, adding 0.6 percentage point to GDP and offsetting stagnation in industrial production. Within that, the category that includes restaurant and hotels jumped 1.7 percent, its best performance since 2012. The robust data come as Theresa May prepares to meet US President Donald Trump on Friday. This will be an important step in her mission to build a “truly global Britain” that, she believes, will be able to exploit export markets more fully once freed from the constraints of the EU’s common tariffs and commercial policy.

Chancellor Philip Hammond welcomed the figures, saying “every major sector of the economy grew last year, which is further evidence of the fundamental strength and resilience of the UK economy”. He added that, while “there may be uncertainty ahead as we adjust to a new relationship with Europe”, the UK was “ready to seize the opportunities to create a competitive economy that works for all.”

“Strong consumer spending supported the expansion of the dominant services sector and although manufacturing bounced back from a weaker third quarter, both it and construction remained broadly unchanged over the year as a whole,” said Darren Morgan, head of GDP at the ONS.

Indeed, the growth was driven entirely by services, with zero support from construction and production, in a continuation of the recent trend of a lopsided expansion according to Bloomberg.

As expected, establishment economists embarrassed by their post-Brexit forecasts, quickly attacked the data suggesting the expansion would unlikely continue. Bloomberg with the report:

While the support is welcome, it may prove unsustainable. Households are borrowing with abandon and saving less, and an expected pickup in inflation through this year raises the risk of a squeeze on incomes. Economists forecast a sharp slowdown this year, and Bank of England of England Governor Mark Carney has warned of pressure from inflation and weaker business spending.

 

“Today’s data was good, but there are pockets of potential unsustainability in household spending that could drive a slowdown,” said Chris Hare, an economist at Investec Securities in London and a former Bank of England official. The “rebalancing” of the economy toward exports, sought by policy makers for years, has so far failed to materialize, he said.

Carney was among the economists who warned before the referendum that the U.K. might have faced a recession if Britons voted Leave. Pro-Brexit campaigners have pointed to the economy’s resilience as evidence that leaving the EU won’t make the country worse off.  Carney said last week that consumption-led growth “tends to be both slower and less durable” as it eventually overtakes earnings. Households borrowed at the fastest pace in more than 11 years in November and credit surged from a year earlier.

To be sure, the fairytale growth story – sustained in big part by the plunge in cable – is likely to face a reversal in the coming quarters. Companies from airline EasyJet Plc to telecommunications firm BT Group Plc have this month cited Brexit-linked problems such as a weaker pound and loss of business as they offered investors a forbidding outlook for this year. The U.K. currency has dropped 15 percent since the referendum in June, fueling inflation by driving up import costs.

Auto-industry investment plunged by more than a third last year as carmarkers concerned about Brexit shied away from long-term commitments, the Society of Motor Manufacturers and Traders said on Thursday.

As a result, growth is expected to slow this year as inflation picks up, driven by the depreciation of sterling, squeezing household incomes. “Growth at the end of last year appears to have relied excessively on household spending, which has been increasingly financed by debt,” said Samuel Tombs of Pantheon Macroeconomics.

“GDP growth likely will slow decisively in Q1 as the squeeze on households’ real incomes intensifies.”

That may indeed happen, but For now Brexiteers are enjoying their day in the sun, having been proven right, if only for the time being.

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