There is also the wild card of the Brexit negotiations, which look set to take place alongside talks on potential new trade deals between the UK and non-European countries. This could go one of two ways as far as UK equities are concerned so investors will need to watch closely.
Significant potential uplift to UK stocks is possible if Brexit negotiations progress somewhat amicably and a degree of free trade is maintained between the UK and EU nations. Likewise if the UK makes quick progress on trade deals with the United States and other large economies.
The danger of course is a complete breakdown in free trade with the EU coupled with a distinct absence of any meaningful progress in trade talks with non-EU nations. This scenario appears unlikely, but should it transpire it could undo a lot of the good work done for company profits by the lower pound.
This possibility is a valuable nod to the fact that we remain embroiled in significant geopolitical uncertainty, which means even great companies with robust earnings can see their share prices take big hits if investors get swept along in a market panic.
