BREXIT WIN SCENARIO
Morgan Stanley
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Base-case index target for the FTSE 100 in case of ‘leave’ is range of 5000-5300; for the Euro Stoxx 50 is 2400-2550
BofAML
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Sees European stocks moving 10% either way after Brexit vote; “leave” result would be risk-off event not just in U.K. but also Europe and, to a lesser extent, globally
Sell-off in Europe could translate into 6%-7% drop for S&P 500
“Unquantifiable risk” whether other EU countries would then attempt to leave EU
Recommends long European low-risk dividend stocks, long SXDP index vs short SX3P index, long European index dividend futures, long MSCI EM
Goldman Sachs
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On average, the ERP (equity risk premium) has risen by ~150bps in past risk-off events. If Brexit were to result in similar scenario, rise in ERP of 150bps from end-May levels would push Stoxx 600 down to 280 and Euro Stoxx 50 to 2400
Cleanest expression of Brexit risk is in U.K. domestic stocks (GSSTUKDE) and especially those with high sensitivity to investment spending
JPMorgan
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In ’leave’ scenario, euro-area equities would likely underperform U.K. ones, whose relative performance would be helped by GBP weakness
Stays overweight on U.K. equities, which trade “outright cheap” on P/B metric
Citi
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Given recent equity weakness, likely policy reaction, new oil price regime, base-case Brexit downside risk is ~5%; at extreme end of the outcome spectrum, European stocks could fall 10-20%
FX weakness, especially in U.K., is a key offset and should, in time, support positive U.K. returns, excluding return of full-blown systemic risk
Deutsche Bank
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Sees 10% downside for European equities
Overweight FTSE, underweight DAX: if Brexit, U.K. equities would outperform European stocks, given likely GBP depreciation as well as U.K. market’s defensive sector structure
Credit Suisse
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If full Brexit scenario materializes, CS strategists would cut FTSE 100 year-end target to 6200 from 6600, S&P 500 target to 2000 from 2150, Euro Stoxx 50 target to 2950 from 3350
In U.K. stocks, worst performing sectors would be financials, real estate, transport, based on correlations with gilt yields, sterling, PMIs
FTSE 250 to underperform FTSE 100 by 10%-15% due to weaker sterling, PMIs
Societe Generale
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FTSE 100 to lose 15%; FTSE 250, Euro Stoxx 50, Nikkei to drop 20%; S&P 500 to fall 10%
Following initial market correction, FTSE 100 would recoup most of its losses, FTSE 250 would remain 20% lower, Euro Stoxx 50 would recover 10% from lows, S&P 500 would move back to pre-Brexit levels
UBS
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FTSE 100 could fall to 5075-5500, or as much as 19%, Euro Stoxx 50 could fall to 2300-2550, or as much as 23%; S&P 500 could fall to 1910-2000, or as much as 9%
Jefferies
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Sees 5%-10% decline in FTSE banks, euro-zone banks falling by at least an equivalent, if not greater percentage
J. Safra Sarasin
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A yes to Brexit would probably take equity markets down another 8%-10%
Liberum
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Favors U.K. pharma, tech, chemicals stocks in case of Brexit
BREMAIN WIN SCENARIO
Morgan Stanley
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FTSE 100 could rally to range of 6500-6800; Euro STOXX 50 to 3150-3300
BofAML
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European stocks could move 10% either way after Brexit vote; ’remain’ would likely cause a 3%-4% rally in U.S. stocks
JPMorgan
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Euro Stoxx 50 could rally to ~3050
Deutsche Bank
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Sees 10% upside for European equities
Societe Generale
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Bremain should alleviate uncertainty in Europe, especially for banks which have been strongly impacted by Brexit fears; Long FTSE 100 (unhedged), long European banks, long Euro STOXX 50
UBS
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FTSE 100 could rise to 6245-6690, or as much as 7%, Euro Stoxx 50 could rise to 3125-3415, or as much as 15%; S&P 500 could rise to 2120-2150, or as much as 3%
J. Safra Sarasin
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Scope for a “no Brexit” rebound lasting probably 2-3 weeks into mid-July
Liberum
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Shares in construction, housebuilding, leisure and staffing could potentially be biggest benefactors of “remain” vote