Weekly Market Commentary 07/15/2016

While post-Brexit uncertainties and anxieties continue to capture the headlines, fears of the apocalypse have subsided. True, just how Britain decouples itself from the E.U. has yet to be determined, and the process may well be messy with myriad unanticipated consequences. The prevailing view is that the outcome will lead to slower global growth, although the expected haircut from what otherwise would occur had the “Remain” campaign succeeded is a matter of considerable conjecture. Among the imponderables that will have a major influence is the political dynamic; the spread of nationalistic sentiment among E.U. countries increases the likelihood that other members of the region will follow the U.K. example. Such
a contagion effect, while remote in our view, would clearly pose a major threat to the global economy.