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Market Update: Britain’s exit

Wade Balliet
Posted by Wade Balliet
Investment Strategy

The following is an excerpt from a Global Investment Management Special Market Update. To read the full update, click here.Man staring at a view of the London skyline from his office window

The “leave” victory was a surprise to financial markets and the world. The United Kingdom voted to leave the European Union in a 52 to 48
vote and will be the first country to do so since its formation. U.K. Prime Minister David Cameron has resigned in the wake of the vote and financial markets have been turbulent. The S&P 500 Index has lost almost 3 percent this morning, but seems resilient when compared to the over 10 percent declines experienced by some European stock markets.

Investors are seeking safe-haven assets, which has pushed the yield of the 10-year Treasury down to approximately 1.56 percent. Britain’s exit will be a slow structural process that will likely take several years. We believe the U.K. will take the brunt of downward economic pressure and the team remains fairly positive on the domestic growth outlook. The Global Investment Management team proactively reduced equity risk in our strategies earlier this year and continue to closely monitor the situation.

Read the full update here.

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