With markets reeling after Britain's vote to leave the
European Union, some on Wall Street expect cooler heads to prevail over the
next several sessions as investors focus domestically on the outlook for the
U.S. economy and company earnings.
The unexpected decision by Britons to break away from the
world's biggest trade bloc raised the specter of a slower global economy and
sent stocks and currencies plunging by historic amounts on Friday.
Friday's 3.6 percent slump erased the S&P 500's gains for
2016. But even as the index suffered its worst one-day drop in 10 months, some
U.S. investors looked for reasons to expect more upbeat trading next week.
They pointed to expectations that U.S. interest rates would
remain low, that upcoming reports would show U.S. corporate earnings had
recently improved and that Britain's breakup with the EU would be gradual, and
not economy-wrecking.
"I don't think this is a catalyst that's going to cause
a bear market in this country at all. People should not be going ‘the world is
coming to an end.’ It's not," said Ken Polcari, director of the NYSE floor
division at O’Neil Securities in New York.
U.S. companies do stand to lose from Britain's divorce from
the EU, a process expected to take two years to negotiate.
Britain was the fifth-largest buyer of U.S. exports last
year, with $56 billion in purchases, according to U.S. Census Bureau estimates.
A stronger dollar versus the pound and other currencies would inevitably hurt
U.S. companies selling abroad.
"There's going to be a lot of reconsideration, pausing,
certain deals that were contemplated are going to change," said Steve
Massocca, chief investment officer at Wedbush Equity Management. "But
ultimately, this is not going to have a fundamental impact on how the world
goes about doing business."
No comments:
Post a Comment