Just like no one really knew how the Brexit vote would turn out — and many forecasters got it wrong — it’s difficult to know now how Britain’s vote to leave the EU will affect global economies and markets in the longer term, but today it’s been a bloodbath.
At different points during Friday’s trading day, the British pound was off 11%, major stock indexes in the U.K., Western Europe and Japan were all down 8% and the Dow Jones industrial average was off 500 points. The Dow ended the trading day down 611 points, or 3.4%, at 17,400. On the flip side, so-called save haven investments rallied. Gold surged as much as 8% before closing up 4.7% at $1,322 an ounce, and the yield on the 10-Year U.S. Treasury note plunged as low as 1.4% before rebounding to 1.57% by the end of the day.
Central banks, including the Bank of England, European Central Bank, the Federal Reserve and even the People’s Bank of China, responded to the carnage by pledging to provide liquidity to global markets as needed.
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Bernice Napach
Bernice Napach is a senior writer at ThinkAdvisor covering financial markets and asset managers, robo-advisors, college planning and retirement issues. She has worked at Yahoo Finance, Bloomberg TV, CNBC, Reuters, Investor's Business Daily and The Bond Buyer and has written articles for The New York Times, TheStreet.com, The Star-Ledger, The Record, Variety and Worth magazine. Bernice has a Bachelor of Science in Social Welfare from SUNY at Stony Brook.
