By David F Lafferty, CFA, SVP – Chief Market Strategist
Thursday’s historic Leave vote in the UK will have both immediate and long-term consequences for the global economy and financial markets. The initial flight-to-quality reaction across asset classes has been exacerbated by the market’s misplaced confidence in a Remain victory leading up to the vote. Stock markets around the world rallied last week while the British pound strengthened. This action has swiftly reversed with the global equity markets off, bond yields plummeting, and the pound dramatically weaker. Not surprisingly, gold has rallied. The vote has clearly caught markets on the wrong foot.