The United Kingdom's national vote to leave the European Union battered financial markets today. The British pound had fallen to a low of $1.3229—it was last at this level in 1985—and the Dow Jones plummeted by 611 points.
CNBC reports it was the Dow's "eighth-largest point loss ever — with Goldman Sachs contributing the most to declines. On a percentage basis the Dow and S&P had their worst day since August 2015, while the Nasdaq composite's 4.1 percent decline was the index's worst since August 2011."
Chris Semenuk, manager of the TIAA-CREF International Equity Fund, told the Wall Street Journal, "We haven’t had what I would say is a crash, but we’ve given back gains we’d taken months to make."
British and European banks lost value—Barclays closed down 17%, while Royal Bank of Scotland fell 27%. A British fund manager told Bloomberg News, "The central banks are saying all the right things and they’re flooding the market with liquidity so you have a more orderly move. You may be seeing some tactical rotation, the U.S. looks more solid now at least until the U.S. election."
Yeah, about that election: One economist spoke to the Times, explaining that the results from Brexit are "essentially against economic rationality and driven by identity concerns and unease about globalization and trade. If such a vote can win in the U.K., that fosters among investors a sense of the likelihood that Trump can also win, and that will have an adverse effect on capital markets."
