When trading started on Wall Street this morning, the Brexit vote was on the top of everyone’s mind. The general consensus was the stocks were going to take a hit, but what happened was historic.
The Dow Jones Industrial Average dropped over 500 points to open the session today.
Yesterday the Dow Jones closed at 18,011.07 and the market opened up and hit a low of 17,472.80–close to a 3% loss in an instant.
The Euro markets are seeing a bigger hit. The British Pound was down 10% at one point and the country is looking at emergency actions they can take to stop the bleeding.
The Euro is also down a significant amount.
Major parts of the global economy were shocked by the UK voting to leave the EU and where we go from here is unknown.
Nobody expected the referendum in the UK to actually vote to leave. Even the leader of the Independence Party who has been pushing against the EU his whole political life, Nigel Farage, gave what sounded like a concession speech when the polls closed.
When the country woke up, he was giving a victory speech. The markets don’t know how to react. Nobody knows how to react.
Scotland is calling for a new referendum to leave the UK and become its own country, and places like France and the Netherlands are thinking of leaving too.
The slide that is happening in our global economy could just be the tip of the iceberg. There is so much division and uncertainty in the world and we are playing out part.
The world is nervous about our elections and in much of the same way, don’t know how to react to a Trump presidency.
With the Brexit, if the economy continues to slide, that will only help Donald Trump. The vote on Brexit was majorly influenced by immigration. That will only help Donald Trump.
The uncertainty in the world will not help our 401Ks and our savings though. Hopefully the markets will calm down and level out soon. Until then, it is a good time to buy gold.