+ 1.33
+ 0.39%
+ 5.18
+ 1.55%
+ 5.31
+ 1.28%
+ 1.97
+ 1.19%

Post-Brexit Panic Isn't Over, CNN Money's LaMonica Says

July 1, 2016 11:27 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

Global equities are in the process of recovering from the post-Brexit turmoil. The Dow Jones index is within striking distance of the 18,000-level yet again while the UK’s FTSE 100 index is on pace for its best weekly performance in years.

On the other hand, CNN Money’s Paul LaMonica cautioned investors that buying into the post-Brexit rally hype is a mistake.

LaMonica pointed out government bond yields offered by major governments worldwide are still lower than they were a week ago.

Meanwhile, the FTSE 250 index, which focuses more on the domestic British economy, is trading notably lower by more than 800 points Friday than it was pre-Brexit vote.

U.S. Federal Reserve In Focus

The U.S. Federal Reserve has been keeping a very close eye on the Brexit vote and market volatile that followed. As such, a rate hike is likely “on hold for the foreseeable future.”

Related Link: Is The Post Brexit Rally For Real? FTSE 100 Index Might Indicate Just That

For that reason, LaMonica continued, investors could benefit from investing in defensive stocks that pay high dividends. For example, food and beverages, tobacco, utilities and telecom stocks all offer dividend yields that are more attractive than most government debts.

“Consumer staples have been oversold on Brexit,” LaMonica quoted Chuck Self, chief investment strategist of iSectors, an ETF strategy firm as saying. “People are going to drink. People are going to smoke. The big dividend payers are going to be fine.”

Bottom line, the Brexit vote is a historic first of its kind and “there is still so much that we don’t know.”

“It’s scary that momentum loving equity and stodgy fixed income investors are both bullish,” LaMonica concluded.

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.

Related Articles

Brexit Trade Talks In Deadlock, 'Progress Remains Limited'

The United Kingdom and European Union Brexit trade talks are in a deadlock, with both sides criticizing each other's negotiation stance. read more

Brexit Update: Coronavirus Creates Further Uncertainty Over UK Trade Agreement

The United Kingdom is meeting for the fourth round of Brexit negotiations between London and Brussels Tuesday, as a comprehensive trade deal to replace the transition phase by the end of this year kicks off. read more

Germany Avoids Technical Recession, Eurozone GDP Projected To Rise 0.5% In 2020

UK PM Johnson Battles To Push Brexit Deal Through