According to Silverblatt, U.S. equities lost $830 billion on Friday, while the one-day loss for the S&P 500 SPX, -1.62% in dollar terms was $657 billion. Indexes in Europe and Asia took even larger losses.
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He said Britain exiting the EU would mean big changes for European economics, particularly if it prompted other countries to leave the union.
The British vote came as a shock, despite assurances from Bank of England Governor Mark Carney, who tried to assure investors and savers by saying the bank was “well prepared” for the vote.
The S&P financial index dipped by three percent in late morning trade, with investors increasingly anxious about London’s status as a financial hub.
Britons voted to leave the European Union over concerns including immigration and regulation.
“This vote is a step away from free trade”, said Bob Doll, chief equity strategist Nuveen Asset Management. “When you add to it the specter of the last couple of years of terrorism it causes the average individual … to be more nationalistic, more populist, more protectionist”. The yield on the United States 10-year bond hit its lowest since 2012.
Banks took the largest losses by far.
The S&P 500 is down 6.53 points or 0.3 percent. By Friday morning, sterling was down almost 8% to $1.37 against the US dollar.
Markets in mainland Europe were hit the worst, with Milan and Madrid each down more than 12 per cent for their biggest losses ever.
The Nasdaq composite declined 181 points, or 3.70 percent, to 4,728.
The pound fell dramatically, to $1.3638.
Britain’s pound plunged to its lowest level against the greenback since 1985 yesterday before making a slight recovery.
Stocks around the world suffered steep losses in overnight trading. France’s benchmark index lost 8 percent and Britain’s fell 4 percent. Brent crude, the worldwide benchmark, fell $2.07, or 4.1 percent, to $48.85 a barrel in London.
The other issue is the very big losses in certain asset classes – like the British pound crashing 12% in just two days or Barclays losing one-third of its value – inflict pain that tends to spread elsewhere.
Only gold producers were celebrating as prices gained sharply, up 4.5 per cent as investors ran for shelter. The futures price settled up 41 cents or 2.4% at $17.76 a troy ounce. The financial index’s 4.26 percent drop led sector decliners and was set for its worst day in 10 months. It gained $2.08, or 5.9 percent, to $37.47.
Semiconductor, computer hardware, railroad, and oil service stocks are also seeing significant weakness, while modest strength is visible among gold and utilities stocks. Just 171 companies in the S&P 500 disclosed sales from Europe in 2015, and the region was responsible for just 6 percent of total revenue in the index, according to data compiled by Bloomberg.
The vote will start years of negotiations over Britain’s trade, business and political links.
“I heard (U.S.) markets were down more than 2 percent (early in the day)”, Morgan said. Those gains were rapidly undone Friday. The Dow dropped 610.32 points, or 3.4%, to 17,400.75.
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The global reaction to “Brexit” is one of the biggest financial blows since the 2008 crisis.
