Brexit Hits S&P 500 Pain Threshold Though Wounds Seen Survivable
- From revenue to yields, stocks remain relatively attractive
- Losses endured thus far partly due to bad trades ahead of vote
Is It Time to Get Back in the Stock Market?
U.S. stocks tumbled after the U.K.’s shock vote to secede from the European Union. In two days, the S&P 500 Index plunged the most since its August swoon and the Dow Jones Industrial Average erased 871 points. Here are cases cited by strategists and traders for why Brexit isn’t the death knell for the seven-year bull market.
The EU may be one of the world’s largest trading blocs, but U.S. companies aren’t as reliant on a bustling European consumer as that status might suggest. Even in the most exposed group -- technology stocks -- less than 11 percent of sales originated in Europe last year. “Direct impact of Brexit to U.S. corporate profitability will likely be contained, with S&P 500 revenue exposure at ~1 percent to U.K. and 6-7 percent to Europe,” Dubravko Lakos-Bujas, JPMorgan Chase & Co.’s head of equity strategy and global quant research, wrote in a note to clients Friday.