The Fall Out : Winners And Losers Essay
The U.S. economy will likely take a modest hit from the United Kingdom’s vote last week to leave the European Union, but the episode is expected to produce some winners as well as losers.
The market turbulence generated by the referendum is already prompting some businesses to rethink hiring and investment plans. And manufacturers that were starting to stabilize after a prolonged slump face a new potential setback. But homebuyers may be dealt a favorable drop in mortgage rates, while U.S. business and property owners welcome a possible fresh stream of foreign investment diverted from the U.K.
Overall, though, the negatives are expected to outweigh the positives. High Frequency Economics has trimmed its estimate for U.S. economic growth in the second half of the year to 2.3% from 2.5%. Goldman Sachs has cut its second-half forecast to 2% from 2.25%.
Yet the fallout from the so-called Brexit is a moving target. Stocks pared their losses Tuesday, though the Standard & Poor’s 500 remains nearly 4% off its pre-Brexit level and further turmoil may await.
“I don’t think it’s a big deal for the U.S. unless the (European Union) splinters,” says Mark Zandi, chief economist of Moody’s Analytics. He notes the nearly double-digit stock sell-off early in the year, triggered by China’s slowdown, was far more significant.
Here’s a breakdown of some losers and winners:
• Manufacturers. U.S. factories have been taking it on the chin for…