Markets in turmoil after Britain’s exit, and that’s just the start of the effects
BUSINESS RECORD STAFF Jun 24, 2016 | 3:44 pm
<1 min read time
0 wordsAll Latest News, Banking and FinanceBritons have voted to leave the European Union, an outcome that has shocked global financial markets, sending stocks plunging and the U.S. dollar sharply higher, Reuters reported.
The decision is expected to have global implications, some of which may take years to play out. Here are some effects Americans can expect to feel as a result of the so-called “Brexit”:
- Retirement funds: On balance, about half of most Americans’ retirement funds are invested in stocks, and they are expected to take a beating on the worry that the British move will destabilize the global economy and torpedo corporate profits.
- Mortgage rates and home prices: One upside could be for would-be homeowners, or those looking to refinance or with adjustable-rate loans. For them the cost for buying a house is likely to drop, at least in the near term.
- The dollar: The U.S. dollar is rising sharply, which could put the brakes on U.S. exports, damaging the sales and profits of dozens of multinational companies based in the United States. And Britain is the No. 5 buyer of U.S. goods and services; the British pound’s plummet will make U.S. products substantially more expensive in the United Kingdom. On the upside, traveling to Britain and the rest of Europe is likely to become noticeably cheaper.
There were some gut-wrenching moves downward in global markets early this morning, The New York Times reported. The British pound plunged to a level not seen in decades. Italy’s stock market was down more than 10 percent, and France’s was off over 8 percent. The selling hit Japan, where stocks closed down nearly 8 percent. On Wall Street, the Dow Jones industrial average was down 460 points, or 2.5 percent, in the first 2 hours of trading.
The Business Record’s Iowa Stock Index was down 2.78 percent as of 10:45 a.m. today.
British Prime Minister David Cameron, who led the campaign to remain in the bloc, announced this morning that he planned to step down by October, the New York Times reported. Cameron said the country deserved a leader committed to carrying out the will of the people.
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