After the Monday closing, when the stock market had its eye set on the stock ticker displaying the closing status of the market, the figures swept the stock market clean. The dollar had become strong against European Euro and Pound which meant increased prices of imports from the US. The state exports beef to many nations including the European Union and the recent split has sent shockwaves through most of the market.
For those who don’t know what Brexit is, let us give you some insight; Brexit is the recent referendum held in the United Kingdom which has led to the separation of the Great Britain from the European Union. European Union’s foundation was laid in 1993 with an aim to increase trade, reduce import tariffs and many other policies that would promote the growth of trade in the aligning nations but, the recent move out of the Great Britain has kindled the fire of uncertainty in Britain and other nations with which it was trading earlier as a part of European Union. As far as the aftermath of the split is concerned the indirect impact has severely affected many markets including the US beef market.
Post-election, the stock market in the US got shaky and the figures on the financial ticker led to some serious concern. The August live cattle plummeted to 0.45 cent, at 108.9 cents, October also dropped down to 0.425cents to 108.9 cents after setting a new lower limit of 107.9 cents. Feeder-cattle futures for August also dropped 0.85 cents to $1.3860 a pound, which is a three-week low. Post Brexit the only thing the stock ticker showed was a downwards pointing arrow and plummeting prices of the cattle stock. The impact is not restricted to cattle stock of the US only; rather the financial experts feel that Brexit will have a global impact.
Unlike the cattle stock market, the pork prices rebounded and the hog index for July ended at 82.27 cents. August also ended .825 cents higher, at 79.175 cents. The wholesale price of the pork jumped to $1.34/cwt adding to Monday’s $90.88/cwt which means a rise of $5. If the market trends have to be believed then many grocers might be purchasing the hog to avoid any shortfall which happens in hot weather. The rise of the lean hogs prices on the financial ticker has drawn many traders to invest in it leave the cattle stock unattended. However, as the time is going by, some rise in the cattle price is projected which might bring the cattle stock back on the top slot on the stock ticker tape.
The Concluding Point:
We are living in a globalized world where the boundaries have merged and the world has become a global village. A small change in one nation has its impact on other nations as well, and the recent Brexit is a living example. The falling prices of stocks and strong position of the dollar as compared to pound and sterling have not only impacted the prices of the products but has also increased the cost of importing the products from the US. However, the story doesn’t have all badly; the gold prices did not feel the heat of Brexit and at the same time the tourism in Britain will gain pace as the prices have slashed down. We have to wait and see how the cattle stock market regains its pace.