Brexit’s financial impact on Northeast Indiana

The global market plummets after the UK votes to leave the EU.

FORT WAYNE, Ind. (WANE) – Stocks tumbled Friday in reaction to the U.K. voting to leave the European Union. The Dow closed down more than 600 points. The president and senior financial adviser of Reynolds Wealth Management in Fort Wayne explained what this means to people in Northeast Indiana.

Greg Reynolds said the value of anything that is interest rate sensitive is going down. The most immediate impact for people in Northeast Indiana is their stock and retirement plan accounts will have less money. 

Brexit is also a problem for investor and saver bank accounts since interest rates are lower. But those low rates are a good thing for those who want to get a mortgage or a car loan.

Reynolds explained that even though stock numbers were low Friday, they’re not low in the big picture. He added that the numbers for decently savvy investors over the last five to seven years are probably even up today.

Reynolds said investors should take the weekend to put together a plan and then capitalize on the low rates.

“Now, this is the time where investors need to have a plan, stick to that plan and be ready to go capture some of this low hanging fruit that’s going to be interesting over the next couple days and weeks,” he said.

Reynolds said Brexit is an unprecedented event for the economic world and it has scared the global market.

“I think it’s the fear of the unknown, right?” He said. “What is it going to do to corporate earnings? What are the unintended consequences of the UK leaving the EU? How does all of it play out? How long does it take? These are questions nobody knows the answers to yet.”

Northeast Indiana businesses with UK operations have been keeping a watchful eye on Brexit.

Medical technology manufacturer Medtronic has operations in Warsaw, IN and the U.K.

“We have been watching with interest the recent vote in the United Kingdom to leave the European Union, and we will continue to monitor the situation,” said a Medtronic spokesperson. “We believe the fact that this vote will not become effective for two years will provide us ample to time assess its impact and respond as necessary.”

Orthopaedic business, Dupuy Synthes, also has operations in Warsaw.

“We respect the democratic decision of the United Kingdom public to exit the European Union and are carefully considering the potential long-term impact,” said a spokesperson for Johnson & Johnson, the company that owns Dupuy Synthes. 

General Motors has an assembly plant in Fort Wayne as well as operations in the U.K.

“It is important for GM’s local operations that negotiations on the UK’s future relationship with the EU are concluded in a timely manner,” a spokesperson said. “It is also important that business continues to benefit from the free movement of goods and people during this period. Communication on the development of the future relationship with the EU should also be clear and transparent. We fully support remaining part of the European Economic Area.”

Reynolds said there is a big lesson people can learn from Brexit’s financial aftermath. He said Thursday night, most people expected the U.K. to stick with the EU, but they didn’t. So, his big takeaway is that polls and data can’t always be relied on when needed.

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