Featured # Markets | 2 years ago

Wall Street Begins to Rebound After Brexit Aftermath

U.S. stocks opened fairly higher on Tuesday, as traders and investors took advantage of the Brexit aftermath, and bought stocks. Banks, which were the most damaged by Britain’s vote to leave the European Union, were most attractive to investors. This past Friday, global equities fell into a tree fall, losing over $2 trillion in market capitalization, as investors switched to safe-havens such as gold and the Japanese yen. The 10-year U.S. Treasury bonds US10YT=RR yielded positive on Tuesday, for the first time in two days. But growing uncertainty over when exactly the country will end its membership will be the cause of future volatility, according to experts.

“I think this is a short-lived rally. There is an awful lot of questions over Brexit that haven’t been answered and markets are going to be reacting to that,” said portfolio manager Paul Nolte, of Kingsview Asset Management. “The U.S. markets are still very expensive without a lot of economic and earnings momentum in the future and are unlikely to move significantly higher in the near term.”

Technology stocks, a sector that was also damaged by Thursday’s referendum, rallied in the early morning trade. These gains left tech giants up anywhere from 1 to 3 percent. While traders and investors do not believe the U.S. Federal Reserve will raise their interest rates this year, they continue to keep an eye on global economic data. The U.S.’ economic growth recently reported slowing down in the first quarter, with rallies by exports and investments in software weakening consumer spending. Gross domestic product grew at a 1.1 percent annual rate, despite a 0.8 percent rate reported last month. This according to the U.S. Commerce Department. Consumer confidence is forecasted to rise to a healthy 93.3 in June, from 92.6 in May.

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