11 Economists, Analysts, Market Watchers State Views on Brexit Fallout Ahead

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24/7 Wall St. wanted to offer up some of the key outside views which have been offered by economists, analysts and research shops for the post-Brexit vote. These have been compiled in a quote format, and some have been shortened to make for a more clear presentation and to remove bullet formats.

Comments have been used from BofA Merrill Lynch, S&P, Moody’s, Fitch, Wells Fargo, Jefferies and more. Here are some of the basic Brexit statements made by analysts and economists on the Brexit and what to expect ahead.

One side note to consider here is that all polls should be heavily discounted here and abroad going forward. The pollsters keep getting it wrong, probably because they can only get responses from those who are most passionate about matters or because of how they word questions.

24/7 Wall St. identified several Brexit issues for readers:

Ag & Commodity Players Getting Hammered

Major Banks Under Fire

Gold Miners to the Moon

8 American Companies Could Care Less!

Greg McBride, Bankrate.com’s chief financial analyst:

We had a big relief rally in expectation of a ‘stay’ vote, so hold on to your hats because markets now have to reprice for the outcome. Today will be an ugly day in global financial markets. But since nothing will change right away, a market overreaction presents an attractive buying opportunity.

BofA Merrill Lynch’s Europe Economic Weekly called it uncharted waters:

Despite indications from opinion polls, the UK has decided to leave the EU. We think that the UK economy will be the main victim, but the shock for the Euro area and global economy will be significant. UK: We expect the economy to quickly enter recession, the BoE to cut rates 50 basis points in July and restart QE potentially in August.

deVere Group, CEO Nigel Green, spoke out:

Britain is filing for divorce from the EU – it’s a shock event. The Brexit victory is a victory for uncertainty across international financial markets.  Brexit-triggered volatility is now only just beginning; we can expect it to potentially last up to two years.

Due the far-reaching impact of this vote, Brexit will inevitably affect the British and the European economies and the wider global financial markets. The decision may have been taken in the UK but it will impact the rest of the world too.

Investors around the world on Friday will pile into safety and prompt a significant shift in global markets from risky assets to safe havens… The world’s currencies, equities and bonds are now on magical mystery tour – at least in the short-term… For instance, the FTSE will tumble, the pound is already in freefall, and investors will be gearing up for probable shifts in the Swiss Franc, to the price of gold, and to monetary policies globally.

There is likely to be two years of varying degrees of market volatility because of the plethora of unknowns. At this stage there are still question marks hanging over so many different areas… Although the impact of Britain leaving the EU will create huge short-term uncertainty across global markets, this is not be the start of an Armageddon-style scenario. The world as we know it will not stop.

Fitch noted that the Brexit result is broadly credit negative for most UK sectors:

The “Leave” result in the UK referendum on membership of the European Union is credit negative for most sectors in the UK, due to weaker medium-term growth and investment prospects, and uncertainty about future trade arrangements.

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Jefferies Chief Global Equity Strategist, Sean Darby:

In a very close contest, the ‘Leave’ Campaign won the UK Referendum(Jefferies view was a ‘Remain’). Financial markets are likely to be unsettled by the result in the short-term with both UK and European equities likely to experience sharp sell-offs. Gold is set to do well.

While domestic UK equities such as the FTSE 250 are set to underperform, the depreciation of the sterling will underwrite the international FTSE 100 to some extent. European equities are set to follow the direction of the euro in the short run but the ‘bedrock’ Scandinavian countries such as Sweden with ‘harder currencies” than the euro and sterling ought to hold up better.

The US S&P 500 has low exposure to the UK economy aside from currency translation from auto sales etc. The S&P 500 will naturally sell-off but it is the least impacted from the UK referendum result. In our view EM equity markets will simply suffer from the move from a strong dollar and the pressure it places on their domestic monetary policies.