We discuss the potential impact on markets and growth following a hypothetical vote tomorrow for Britain to leave the EU. Into a full Brexit scenario, our FTSE 100 year-end target would fall to 6,200 from 6,600. We would also take our S&P 500 year-end target to 2,000 from 2,150, and our Euro Stoxx 50 target to 2,950 from 3,350. We would move UW of peripheral Europe. Based on correlations with gilt yields, sterling and PMIs, the worst performing sectors into a Brexit would likely be financials, real estate and transport. The best performing sectors would likely be pharma, consumer staples and energy
--> Into a full Brexit scenario, our FTSE 100 year-end target would fall to 6,200 from 6,600; the FTSE currently looks c.10% cheap on our model – recall c.70% of FTSE earnings come from outside the UK. We would also take our S&P 500 year-end target to 2,000 from 2,150, and our Euro Stoxx 50 target to 2,950 from 3,350. We estimate the Euro Stoxx needs to fall by 5-10% relative to the US to hit the same crisis P/E as we saw in the Greek crisis and, so far, only 35% of post-2014 inflows have reversed. In this scenario, we would move underweight of peripheral Europe, where the key drivers have been spreads and the euro.