The Motley Fool

I’d avoid these FTSE 100 dividend stocks and their 5% yields following this new Brexit warning!

Image source: Getty Images.

In a very recent article, I explained why the FTSE 100 could come under pressure in 2020 should the pound extend its recent surge, an ascent built on the near-term Brexit clarity afforded by the  Conservatives’ emphatic general election victory.

The ink was barely dry on my piece however, when reports emerged that have shot down my earlier optimism. The pound is backpeddling once again on Tuesday morning, and some of those UK-focussed stocks which soared at the tail-end of last week are falling too.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

So what has happened? Well, in a shock move designed to sort the Brexit issue once and for all, Johnson will reportedly attempt to write the withdrawal date of December 31, 2020 into law. This is the day on which Downing Street hopes the country will exit the transition period and have a trade deal with the European Union all sewn up.

No-deal back in play!

By passing an amendment to his withdrawal act, the only two scenarios that’ll subsequently be on offer will be to get intricate trade talks finalised in just 11 months, or Britain embarking on a disorderly Brexit at the end of next year. And many market commentators believe the chances of the former being executed on time rate from slim to none.

The beauty of Johnson’s thumping Commons majority is that he can always change the law again depending on the progress of trade negotiations and his desire to avoid a cliff-edge Brexit. What last night’s reports show is he’s determined to get the issue dealt with next December by hook or by crook. “Get Brexit Done” seems not to be an empty election mantra for Number 10 then.

It’s important that investors need to do their utmost to protect themselves and their investments in the new year, one in which businesses could continue delaying investment and the share prices of UK-focused stocks start trending lower again as that end-of-year cut-off approaches.

Banks in bother

Britain’s banking sector is one industry which has come under increasing pressure in 2019, with revenues flatlining at best and the number of bad loans on their books ballooning. And so it’s unsurprising to see some of the country’s largest listed lenders like Barclays and RBS fall again following that Brexit news, led by Lloyds, which is down 5% at pixel time and has lost almost all of its post-election gains.

The Footsie banks are still cheap, each of the three above trading on forward P/E ratios below the value benchmark of 10 times, as well as boasting big dividend yields above 5% for next year. But their low ratings are a reflection of the unforgiving political environment and consequently patchy economic outlook, two themes that look set to remain in play in 2020.

For these stocks then, the risks continue to outweigh any potential rewards and I plan to continue avoiding them like the plague.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.