Brexit Means More Easy Money, and U.S. Stocks Love Easy Money (For Now):
In a normal world, Brexit would be bearish for capital markets and the economy but in our easy money addicted world, Brexit is actually bullish for U.S. stocks. Why? Because it gives central banks the green light to continue (if not do more) easy money. For now, investors love easy money and are buying stocks because there is so much negative news priced in to the stock market and the economy that any bullish news (Friday's stronger than expected jobs report) is enough to send stocks racing higher. Investors also do not have to worry about a hawkish Fed because the Fed can now easily wait until after the election (if not longer) before raising rates. All they have to do is say they are "watching" the impact of Brexit on the global economy and keep kicking the can down the road. Additionally, if the U.S. economy weakens, they can easily lower rates (and cite Brexit) and then pump more easy money into the system. Remember, central banks have one objective: keep stocks higher (long enough for the economy to kick into gear).
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