The biggest news in markets across the world was the British vote to pull out of the European Union after some 43 years as a participant in the EU (and the former Common Market). It’s estimated that global markets lost the equivalent of $2 trillion in value on June 24, when the results of the Brexit poll became clear. In the United States, the Standard & Poor 500 Index took a dive, plunging 76 points or 3.6 percent. The Dow Jones Industrial Average did the same, falling 611 points or 3.4 percent, and the Nasdaq Composite dropped 202 points or 4.12 percent. Here’s an overview on what Brexit means for the United States.
How will this affect the United States?
The U.S. markets’ losses represent some $675 billion in market value, which erased all the year’s gains to date. On the other hand, U.S. currency and bond markets saw a surge as investors fleeing the Brexit-induced turmoil turned to alternatives outside Europe. The U.K is not the most important U.S. trade partner – ranking 5th or 6th behind other nations. However, in an age of global connectivity, U.S. markets, the financial industry and various corporations will be affected to some degree by what plays out in the U.K and in Europe as a whole. Some thoughts to consider:
The U.K.’s exit from the EU will be a complicated and lengthy process. It will be some time before the full ramifications for the British, Europe and the global economy can be understood and measured.
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