Pressure, and currently down 8. 4 , and yesterday, 1. 50 and 1. 36, and the euro is similarly reacting as people are getting a look at the euro project, and gold is a trade higher, and crude is at 7. 91, and so at this hour, really, for what you should do with your portfolio, jim lebenthal, and josh brown and jon najarian, and joining us is a jpmorgan global strategist. And sara eisen is on the ground on the day after this historical vote. Simon, the destiny has been voted on outside of the eu, and today, the people are expressing surprise and shock, because they had originally voted to stay in the, u while a majority of england did not. The final tally is 52 of brits decided to vote out of the eu, and 48 decided to stay in, and i have a bunch of paper here, and sort of the late edition late papers that really reflect what a historic day this is, and maybe a new day in the uk, and many of them are calling june 23rd, yesterdays referendum day independence day, and this is the daily mirror, and we are out with the british voter on the british flag, and lot of people celebrating sort of the nationalism that the daily express, historic day for britain, and up here at the top, they have 65. 1 Million People, and that is the British Population that was announced yesterday, and of course, the paper editorializing just as we told you that the uks population out of control with a picture of a lot of people sort of suggesting that the immigration problem, and the immigration of the migrants from the rest of the eu which faced a lot of backlash here in the uk and one reason that we are seeing the emotional reason for why the brits voted out of the eu. And of course, the Guardian Newspaper leads with David Cameron, the british Prime Minister facing a fight for survival and we know how that fight is going to be ending, and before the brits woke up this morning, David Cameron reported that he would resign, and needed fresh leadership, and he poured the heart and soul into the campaigning of voting out of the eu and he said that a new person and new Prime Minister is going to have to lead the uk when it comes to negotiations with the eu, and a great deal of certainty has to point out that no country has ever voted to leave the e nushgs the sixdecade history and not the least of which is the second Biggest Country within the eu, and the uncertainty is coming down to what is going to happen between brussels which is the Head Quarters of the european commission, and with the uk, and the leaders this weekend will be scrambling ahead of the already scheduled meeting on tuesday and wednesday in brussels for all 28 members of the European Union and the question is does the uk vote or decide to trigger article 50 of the lisbon treaty of a previously set rule in 2007 which would start the twoyear clock on negotiating out, and that is everything like budget negotiations and the rules of migration, and the taxes and trade deals, and so it is unchartered territory, and we continue to wait for the reaction from the politicians, the markets, and of course, the betting odds and the polls all getting it wrong in the leadup here. Back the, you simon. Thank you, sarah. And now we are focusing on what it means for your money, and Alan Greenspan had this to say earlier on cnbc. This is the worst period i recall since i have been in public service. There is nothing like it with the crisis of the october 19, 1987 when the dow went by a record percent down, and that is what i thought was the bottom of all potential problems. This has a crow zi effect which is not easy to go away. And of course, what greenspan is referring to is the concern that the european project could unravel. He is also worried about the longer term entitlement ss and e productivity and wages, and john n this environment, when you hear the bigger warnings, it is a buying opportunity, and can you take it at face value . It would be buying opportunity, and would be right now overseas and not a buying opportunity right here in my mind yet, because we came off of the bottom so quickly. I was looking for and i think that if anybody had dry powder, and they basically said im going to wait for the brexit vote, and then commit the capital, they are do not doing it on a down 300 day, simon or the down 400 day, but looking for the blood in the streets, so i think that somebody would be prudent rather than scrambling in and saying, well, a 2 decline in this stock or the in facebook or the apple, and this is not at all like it was last summer. And what did you do . What have you done today . I took the profits on gold, which is, and i didnt think that it would be my best trade, but gold outperformed the vix and the uvxy and the put, and these are bets i had into the brexit vote putting them on thinking that the spdr puts or the volatility would be the best performing, but no, gold made a 7 move like that, and just surged through a bunch of the strike prices for the gld and that is where i got the extra octane for my account today. And jim . Well, i want to be specific, simon, because it is a buying opportunity, but today not the day to do it. You should expect selling to increase as the after noon goes on for a simple reason. Everybodys Predictive Power is weak right now, and that includes the media and the market prognosticators like myself and you have three days worth of news items before the market comes out, and so if you are a Portfolio Manager or trader, you are saying, why commit capital and risks this afternoon and wait and get three days more information to put it to work. Monday . I expect it down, too, and you can draw a parallel to when the chinese devalued the currency on a thursday night, and friday down, and monday a great buying opportunity, and several on our desk took advantage of it, and i would expect the same thing today. And i want to point out something important, that rarely the big money has got it wrong, and the Merrill Lynch survey told us ten days ago that 2 3 of the managers did not expect this to happen, and they are not positioned for it, and they may have 6 cash and they are not positioned for this . That is right. We said on the show that the markets were getting comfortable with what going to be a remain vote, and that is how people were positioned, and that is why we are seeing the reaction, and so i would say that the referendum result itself is a stunner. However, the markets that we have is reaction that is t textbook and this is what you would get when everybody is positioned wrong. I actually agree with everything that john said that there is not many tremendous opportunities yet, simon, and the best money and trade is overnight, and the dow futures is down 700 and change, and opened up this morning down 500, and improved to less than slightly less at 400, but it is happened. And the average stock on the s p is not clobber and down 3 , and 70 of the s p 500 components are up from the open, and really, you have seen the bounces everywhere except for the financials. And financials probably dont bounce today, because to john and jims point, headline risk over the weekend, and concern whether or not the banks are ready for this, and regulators and exchanges are ready for, this and you will see the xls down laying on the the lows and the insurance companies, et cetera, and im not sure that you want to be in. What i am doing specifically is that i have some buy limited orders n and i am looking for the fecs which is the dow jones of europe, and i would love to be a buyer, but i want it lower, and the dxj is the same, and the yen is lower, and i believe there is a chance for japanese stocks and things like jpmorgan and High Quality Companies are ready for this, but i want them lower and i believe we will get them. And how much lower on the japanese stocks . Well, i think that is a huge move overni t overnight. The risk of the japanese stocks is to where they were in august which is not close. And anastasia . Well, we have to look at the opportunities, but i agree with everybody on the panel, this is not the end of the selloff here, because you know how these things play out, and the volatility levels are triggered and all sorts of factors are trigger and so to say that there is a lot of the near term uncertainty, we expect, but you have to find the sweet spot in all of the uncertainty, and to me, that sweet spot is not necessarily in the equity markets, but it is in the credit markets right now, and one thing that is getting so overlooked ahead of the brexit vote is the fact that ecb has started the Corporate Bond purchase program, a bind the way, if this continues to unravel they may be joined by the bang of england as well, so if that is the case, i want to own those corporate spreads, and i want to own those bond bonds. And by the way, financials within the credit space may be an interesting trade as well, because you may not like to take the equity risk, because there is quite a risk of the proposition, but maybe you want the coupon and take it in credit. All right. Pick it up on that point in particular, and now, going through many market dislocations in their time, and joining us is our next guests. Edward, what are you thinking there . What are you thinking and the the comments on credit . Well, the comments that greenspan expressed, i thought they were extreme. He compared the Current Situation to 1987, and he said that he does not recall as bad as back then, but what about 2008, and 2009 . That is much more severe. So i thought that his comments were over the top quite honestly. I think that he is overreact in to the situation. Look, the bottom line question mark here is, is this going to be lead ing ing to the recessio the global basis or in europe or lead to a recession in the United States . I dont believe it is going to be leading to a recession in the United States, and europe has been kind of muddling along, and they continue to muddle along, and britain, maybe they will get a recession, but look at what is happening to the pound. They are going to get a lot of stimulus from the weaker currency, and on balance, everybody says it is two years to negotiate this thing. And so we will come back next week, and these folks from the fed, and i like to call them the federal open Mouth Committee will undoubtedly start to ch chatter away that good thing that we didnt raise the Interest Rates at the last meeting and wont do it in july and i would not be surprised none and done for the fed. And pointing out that we are looking at the s p 500, and the markets are tracking lower getting down to the initial print of the down 3. 5 , and the open, so that the market, and there is a wave of selling coming through as predicted by the panel. And ed, what do you buy . Well, you know, im not a short term trader and i have been bullish since march of 2009, and the question to me is that if it is a bull market, and it is, but it is long in the tooth. It is driven by the earnings, and the Earnings Growth is going to be sub par or kind of back to normal, if you will, which is what you will get in the late stage of an economic cycle, and the dow llar is going to hurt some, but even up to now, we have had a strong dollar since 2014, and i think that you pretty much buy the across the board port fofolio, and the bea up stocks here in the industrials and the Consumer Discretionary look interesting, and the utilities with an extraordinary ru extraordinary run, and some in the yield, and some of the riskoff stocks are due for the risk. And larry, are you going to be specific of what is going to be working from here . And one thing that we have from the bear traps report, we have a mod nal model that is going to be measuring capitulation, and we have something nowhere near capitulation, and the banks, we are seeing the capitulation for the ones greater than february 10th, and typically with the political news and cycles like this, there is a lot of the clarity that comes in the following weeks. So i think that you can buy the european banks here for the trades in the next three or four weeks and add to them on the weakness, but it is an extremely high hurricane category 5 hurricane in the european banks. Thank you for your time, ed mcdonald and gary modini. Thank you. And now, you can see the dow back down with a loss of 500 point points, and still ahead, the big bank selloff from the u. S. Financials taking it on the chin. A top analyst will join us to tell us what he sees amid the pricing. And we will talk to the ceo of eaton vance what he is doing with the 8 billion under manageme management. As we head to the break, we will look again at at the s p 500 heat map. Heat map. Who lives here and flies to hong kong, to visit this company that makes smart phones, used by this Vice President , this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. Youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Man 1 man 2 i am. Woman exmilitary . Man 2 four tours. Woman you worked with computers . Man 2 thats classified, maam. Man 1 but youre job was Network Security . Man 2 thats classified, sir. Woman lets cut to the chase, here. Man 1 whats youre assessment of our security . Man 2 [ gasps ] porous. Woman porous . Man 2 the Old Solutions arent working. Man 2 the world has changed. Man 1 meaning . Man 2 its not just security. Its defense. Its not just security. Its defense. Bae systems. Welcome back to the Halftime Report and we are keeping track of the huge Market Reaction in the wake of britain voting to leave the European Union that we are leaving last night and the biggest selloff is clearly in the financials and the bottom is barclays down 22 , and we have lost a quarter of the value, and you can see them in ascending order all of the way up to jpmorgan and at least one of the biggest losing names and still down 5 , and jim, what do you own here . And i own citigroup, and simon, yesterday the fed stress results came out, and positive for citigroup, and up 1 afterhours and the brexit vote, it goes down the other direction, and this applies to the u. S. Banking sector that the worst is in, and i do think that you can own these stock, because what you can stay away from is the european stocks, because of the degree of sun certainty as to who could leave the European Union, and it is an environment in which the banks are to lend with any risk control, and the rates are going to be going lower hurt iing the margins. Isnt that lower and about weaken i weakening the Capital Markets in general. That is a contributor as well . Well, can we see that, and factor it in or is that still to come . Well, simon, you are absolutely right, and it is on the come as of right now, and yesterday, you had twilio coming to market, and all of us thinking that perhaps this is the opening of the floodgates for the ipo market, and we will put that on the hold for a few weeks. Josh . Well, two superlatives that stand out to me today and i like superlatives, because they tell me that we are either toward the beginning tofr end of the trend, and the first is that the ratio right now, simon, and it is having the strongest day since november of 2011 and that is a huge move that you are seeing in long u. S. Treasury where everybody is stop buying the yen and buying stock, and this is the vanguard of the vgk is how you get exposure to the european stocks and including the uk stocks because a loft othem separate out, switzerland and uk and this is down 9. 9 , and this is the worst day since 9292008 with which is the lehman for them. And this is the exhaustion point for the riskoff trading and that gets me excited and then i look at the european individual names there, and none of them look like they are done going down and i dont want to keep any eye off of them, and say, yes, blindfold myself with the financials indiscriminately. And so you are saying, dont do it yet and wait for the whites of the eyes. Yes, i cant get behind the european banks yet. Anastasia . Well, it is stuff for the financials here for a short period of time, and the issue is that as jim mentioned the lower Interest Rates bush the other is the funding cost, because the ecf trades going out and you will get the funding costs going up up, and the lending rates going down, and that is not a good mix for the profitability of the banking sector, but it is true in europe, and also true in the u. S. As well, because brexit does mean that the fed puts it on hold and again, we cannot get out of the banking sector, and turmoil until we have higher rate ares. And suddenly n the environment where the ecb opened up tuesday once again, and here, have as much free cash as you want bts and i will pay you a premium of four euros for every thousand to rein vvest. Yes, that is factored into the market where as the brexit up until this morning was not f factored into the market. But i want to add from the contrarian in me, and the contrarian standpoint, it is hard not the look at the financials at this rate, because we do know that the rock bottom level of Interest Rates are priced in, and so if we get one incement ally positive, you could have a positive in the financials. And joining us on the phone is the deputy finance minister from sweden, mr. Lund gren, and what is your reaction to the vote by the british, and is secondly to fallout that we are seeing in the markets . Well, first of all, i was astonished and i did not think that people could be so negative. I mean, obviously, this is something that is going to be hurting the british people. And when it comes to the uncertainty following, because i think that everybody believed that the remain would finally get in the majority, and so, give given the uncertainty, the market overreacting, and so on the other side of the southern europe, it is still that people are remembering the problems that exist, and they are structural problems in the economy, and the spanish election in the coming days which can be hard to see any good coming out of it, and so i can understand the reaction even if i see that it is a little bit of the overreaction. And we have bill gross on the network earlier, and he has been suggesting that as far as the south european banks are concerned, they are the eye of the storm with the price action and he thought that they were well covered and so are you saying that the market is ahead of it in a more profound way. I would say that they are still, i mean, ta the volume in the european banks ist better capitalization, and that is why i can see even in italy and spain, i think that there is an overreaction, and the situation is greece is somewhat worse if you are looking at the structure problems that i have there, and obviously, i mean, the result is going be let trade growth going down, the eurozone and great brita britain, and sweden as well. So, of course, what is happening is very negative. But you will be aware that what most people are fearful of is that the european project is unraveling and by that, they mean the eurozone, and if that went down, the lehman collapse would be a side show arguably the concern. Is that real . No, i dont think so. I mean, so much invested that britain has never really been a loyal and very, very good partner really with the european project. And thinking about the European Union without Great Britain as a partner, so i believe that the eurozone can still get together, and so we wont have this big crash coming out of the situation. Although, there is going to be some turbulence over the next months. And it is an important message, sir, and thank you for sharing it with us. Bo lundgren, the former sweden deputy finance minister. Coming up, gold is soaring to a new twoyear high as the investors are rushing into the safe haven assets, and jon najarian has been riding this trade all year and find out if he is sticking with it. And as we go into the break, a look at the global yields right now as the flight to safety continues. Its more than a network. Its how you stay connected. With centurylink as your trusted technology partner, you get an industry leading Broadband Network and cloud and hosting services. Centurylink. Your link to whats next. With usaa is awesome. Homeowners insurance Life Insurance automobile insurance i spent 20 years active duty they still refer to me as Gunnery Sergeant when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and im a usaa member for life. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. Welcome back to the Halftime Report where we are watching the safety trades rally on the heels of the uk brexit vote, and gold is at the highest level in more than two years around and the minors are up across the board led by newmont and barrick and gold tlt corp. Yes sh, the gold trade is ba on after the brexit vote, and gold made a big move today about 60 right now in this point of the session, and would you want to get in this trade right now . No, i wouldnt, and the simple reason is that it is less than 5 from the high last week. And what does that tell us . It tells us that people are focusing on the other haven trades and for example the 10year futures and another problem for gold is that it is denominated in dollar ares and 2 rally in the dollar today make makes it even more expensive. And chris, you agree that there is a cap on where gold could go from here or does it continue to rise . No, i think that it continues to rise, jackie, and with the great move to the dollar on the upsi upside, gold is still up 60 on the day, and 1,300 is the new 1250 and the fed, i dont see them raising rates at all, and that is supportive of gold, and we have had four times the normal volume, and controlled chaos down here, and 1,300 is where i want to buy it, and get long, and this ist not the end of the uncertainty factor. And in the meantime, the futures will be back with the opline show tuesday at 1 00 p. M. Thank you, and back to the simon. Thank you, jackie. And now, the heat index, the yields are playing like utilities and the telecoms and the utilities are higher, and telecoms are losing the lead. And jim, what is the advice here after so much of the hunt of the yield for such a protract ared period of time . Well, simon, it is looking to make sense for yield here, and we are in the third year of the s p 500500 being in the range of 1,900 to 2100, and with todays news, there is little news to give us impetus to the far side, and as said, there is not a recession in the offing, and stuck here, and the yields matter, and having said that, i do believe that utilities are a little bit too defensive right now, and you can take some risk in some of the cyclical names and Something Like a General Motors or the Marathon Petroleum where you will get 3 to 5 dividend yields and a little on the upside as the economy performing a little bit better than expected. Well, you dont want to get too defensive here which is why i would say that i would not go into the you tutilities and the telecoms necessarily, but i would look at the u. S. High yields and if you do that you are looking at 6. 5 spreads and if you are getting a norecession economy, and things are looking up here, which is why i e suppose that i wore green today to stand apart here, then i think that you will get the spread tightening and that high yield space and i would rather take that risk here. So would you be looking to increase the cashalances for the foreseeable future . We have been advising the clients to raise some cash and not be rushing to deploy it in necessarily overnight. So as a result, a lot of the multi portfolios have reduced the equity exposure, and the cash values as Merrill Lynch has 5. 76 , and elevated so we are looking to deploy the cash, but doing so selectively and not rushing to do it all in one day. Thank you, anastasia. And coming up, 18 billion worth of advice from eaton vance. And find out how people are reacting to the brexit vote and the chaos they were warned about. Sara eisen will look at that after the break. And the nasdaq and the dow down, and the s p 500 down curre currently 2. 8 . Just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing man 1 i came as fast as i man 2 this isnt public yet. Man 1 what isnt . Man 2 weve been attacked. Man 1 the network . Man 2 shhhh. Man 1 when did this happen . Man 2 over the last six months. Man 1 how did we miss it . Man 2 we caught it, just not in time. Man 1 who . How . Man 2 not sure, probably offshore, foreign, pros. Man 1 what did they get . Man 2 what didnt they get. Man 1 i need to call mike. Man 2 dont use your phone. Its not just security, its defense. Bae systems. Welcome back to the Halftime Report where the dow is down 500 points, and Courtney Reagan with the headlines. Thank you, simon. This is what is happening at this hour. Donald trump is in scotland to reopen up a golf resort he owns. He thrust himself in the heart of the struggle to praise britains vote to leave the European Union. It is a great thing. It is going to be great. No, i think it is great. I think it is a fantastic thing. Reporter the senate has reached a bipartisan agreement to require relabeling genetically modified foods and it will be requiring a Digital Label accessible by smartphones and the department of ak ri culture has two years to complete the labeling regulations. And now, the cdc has confirmed the contaminated water supply in flint did harm children. The dangers was 50 higher of harmful issues for children when water came from the flint river. And the 25,000 member union of flight at ttendants is hopin to find an agreement. And now, David Cameron said if britain left the eu, there would be market turmoil, and there, they have it. Back to you, sara eisen. Well, i will get a better feel when the pubs fill up. We are getting a reaction to the classic vote including a Music Festival that is going to be under way this weekend from acts all over the globe, and the reaction is from most of the young people who were favoring inside of the eu and we went there to catch up with a few voters who were clearly disappointed. Have a look. I was feeling really shocked when i woke up this morning. And yeah, im not happy about it. And im worried that this there is going to be a lot of ain anger and division in the months and the years ahead. I am happy. I have been away from home, and you are looking at the results on facebook, and when i saw it this morning, we made a sign. It had to be done. Everyone has an opinion, and 72 of brits turned out to vote. That is a greater turnout than actually during the general relek shun, and a sign of just how engaged people were, and the debate of whether they are in or ott, and i cannot understate how monumental the vote is, and not only do the britain people defy the experts of the bank of england, and imf and the american treasury, and the president s and their employers also looked at their res ignatin of their own Prime Minister, and now they will have to settle in what is a messy divorce in what was meant to be a permanent economic relationship. And perhaps the concerns about immigration all of that. Sarah, thank you for that, and i am not sure if the glaston bury are the voters who voted to leaf overall. Have you done it, mike . Yes. Adele, and big name. And i watch it on youtube, because they livestream the whole thing. I cant believe it caused brexit. Cra crazy. Singlehandedly. And one of of the colleagues have been buying the uk banks during the course of the show already . Yes, i bought barclays, bcs and bought 10,000 shares and buying it for the clients although i am not the one pulling the trigger on, that and i have sold the puts as well. So josh and i were talking about it, and this stock was over 11 yesterday and im picking it up with the put sale and picking it up for 7. 50, but the rest of it, im buying at 8. 30, and the stock itself, and that is representing a great value even if they cut the dividends, because right now, it is a 4. 5 deal. And you are only a buyer, so you should be on the board of directors. And it is rare for you outright to buy the stocks and not the commentary that you come up with . Yes, and simon, it is such a cheap stock that it is like an option itself and options on netflix and apple that are more expensive than barclays and soy have cash in the portfolio, and that is one stock down 25 this morning that i can say, well, this is thrown out with the bath wau e ter and i will buy it. And the dow is trading down over 500 points, and taking a brief leg into the negative territory, and our next guest is a chief Investment Officer at eaton vance where he oversees 88 billion in assets joining us from boston, and eddie, are you surprised on the pricing here . What is the views . I am not surprised. Big news. It is going to have the impact on the uk and the european economy, and the global Portfolio Managers in london are treating the recession in europe as the base case, and given that, it is, i think that it is going to be the Market Reaction across the equities and currencies and commodities and Interest Rates is perfectly appropria appropriate. It is not just the banks, bu t the properties and the other banks around europe, and travel Companies Like british travel, and is that the time and the place now . Well, my instincts are to be contrarian, and value investor, and when i see a sea of red on my screen, my instinct is to want to buy, but if you are reflecting on what is happening on the last week, we have rallied prior to today and many of the markets and many of the stocks are only back to where they were a week ago, so i dont believe we have seen enough of the pullback to pique my interest and buy risk. In the Equity Portfolios we are quality oriented and defensive. And what about the dynamics of what is coming up in the coming days and the commentary from the panel is that the big investors were not positioned for this, and therefore expect wave upon wave perhaps of selling coming through, and that is why again we are coming down on the session overall, and maybe why you will see monday and tuesday and wednesday fellowthrough, and what is the view here . Is that incorrect . Well, it is maybe incorrect, and there is a tremendous amount of complacency in this vote, and a little bit of the concern last week, and rallied for the first four days of this week, and nobody is looking for this result even though the polls were suggesting a real possibility. So it may take more than one day for the weak hands to be flushed out. So if we are getting a pullback that lasts into last week, and we have more meaningful falls in the stock price, we will be looking to get risk, and not just yet. And josh, appropriate to recommend a bounce from this on the contrarian, and cheap enough to be bounced in and the longer term ramifications meaning that we have spent three months talking about brexit, and what if we are talking about it in three months and then italy and spain and on down the list. I dont believe that anybody has come templated that seriously until today and what does that do for investment, and what does it do for the Business Investment or do to the multiples on european stocks. Can you help us to separate out the two risks here . Well, that is exactly right. There are tremendous number of ri risks now unleashed on the market, and as we know the markets in Company Managements dont like uncertainty, so not knowing what the rules of the road are going to be for the uk or for potentially the rest of europe, think about if you are the ceo of a company and you were thinking of building a factory in the uk or you have employees in the uk now, and some of whom are continental europeans and what is the work permitting status going to be . It is going to take probably two years to figure out the answes s to ez all of those questions and i expect the companies to sit on their hands and not make any investment in capital or people for two years which has to the lead to the recession in uk and europe, and so there is a consequence to earnings, and therefore a stock that has pulled back may look appealing in it for the e lower price, but the earnings are going down, so maybe they are not cheaper, and one thing is the eb to sales and the sales valuation metrics rather than the p. E. Ratios to contemplate the probability of recession, and make shure that e are not overcalculating the earnings. There thank you, Eddie Perkins when you have more on that, joining us from eaton vance. We will get wilfred frost for what are the next steps of the exit proare cess going to look like, and plus a look ahead at the other headline events to watch out for in europe, because as eddie said, we have a process to work through now. And before the break, here are the stocks working clearly on the upside today, American Electric power, and American Water works and you can see the trend. We are back in two minutes. You can fly across welcome town in minutes16, or across the globe in under an hour. Whole communities are living on mars and solar satellites provide earth with unlimited clean power. In less than a century, boeing took the world from seaplanes to space planes, across the universe and beyond. And if you thought that was amazing, you just wait. Youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Well, what was a tough afternoon is going to be tougher by the looks of thing, and the market is heading further to the downside and the loss of the dow is over 500 points, and perhaps more importantly, the s p 500 as we are looking to the key levels there and currently trading below or with a loss greater than 3 . Your thoughts of this particular stage, jim . Well, this is the incemental selling at the beginning of the show that will build into the afternoon and there are going to be some bargain seekers much like jon was buying barclays and we were talking about that a moment ago and why you should not go out to sell, it is because there is an element of inder term nan indeterminate on, and i predict the headlines for monday to be choppy start of the day. And positive . No, negative headline, and specifically, we are hearing from the netherlands today that there is a Building Movement there that they want to be the next one to the leave the European Union and i expect more headlines like that, and what has yet to come, and it is not going to be coming over the weekend, but well downstream of it what action the eu are going to be taking to quell the dissension within the ranks and how hard do they make it for the United Kingdom to break from the European Union, and that is not going to be playing out over the next few days, but months, and those could be positive, but over the weekend, only negative. And they may come through with the economic proposals and the political proposals and arguably, the undoing is the immigration, anastasia . Yes, it is what i agree being light on the risk for the weekend, and what we heard this morning is that they want to wait and drag it out as long as possible before negotiating the package. It is now a positive for the market, so i am a little bit cautious of that, and the other thing they m cautious of is that what this is setting up right now is the test of the limits of the monetary policy, and yes, the central bank liquidity, and yes maybe lower rates, but the reality is that you are not going to quell the s and 50some noneuropean deals. Youre knoll going quell that with monetary policy. There is some government response will be needed. But to jims point, you really expect that positive response over the next three days, it sucks. Having said that, i dont think investors should get overly defensive here. If you look at the ten year treasury at 1. 5 or the 20 basis point move, you know, weve gone too far. Is it possible for them to come out with something in unison . Bank of england is talking about 250 billion. With existing liquidity provisions . Yes. Well, right. So the thing to think about is i dont know if it will be coordinated and say its coordinated. But absolutely, weve seen them get out of situations like last august in such a way. People shouldnt be shocked by the potential for twoway trades even if were in a down trend. And we can get a plunge protection sort of situation, simon, where people on twitter love to talk about it all the time. The potential that the government itself steps in and buys. Which government . Virtually all governments. Really . Yes. Japanese government, the uk, the European Union, all of them. Bonds or what . Both. I doubt it. Im sorry, john. I hate to take out on this note. Theyll talk about it nonthe less. Josh is right. There is activity going on right now. Its not like the fed wasnt aware that this could happen in the u. S. Or the ecb or bank of japan. The problem is the tool kit is basically empty as far as effective tools to combat the recession here or abroad. I think josh is being mischievous. A little bit carried away. Okay. Lets take a break. Down dow over 500 points. Points. 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And plants needed to give my shop. A face. No one will forget. See what the power of points can do for your business. Learn more at chase. Com ink markets are down. Lets get more from will in london to what is next now for the uk. Will . Thanks. So what happens next after David Cameron has stood down s . The most important thing to note is there is no nationwide election. The leader of the party with the most seats in parliament and that will remain the conservative party through to 2020. So in the autumn, well have a leerdship battle. The new leader of the party will welcome the Prime Minister. A number of contenders including Boris Johnson who tops the list. The most important point to make with all of these contenders, theyre mainstream politicians, normal people. The main outsider in the whole campaign of recent weeks, the leader nigil faraj, he doesnt have a slight chance of becoming Prime Minister. Hes not part of the conservative party and hes not even an mp. So even though we have seen a drastic vote for change here in the United Kingdom, the next leader of this country will be a pretty mainstream politician from the conservative party. Simon . Theyre going to have work cut out with negotiating. Thank goodness for. That thank you for that. Wilford frost in london. Lets get a look at our market. One of the things im watching is u. K. Energy. The reason being if you segue into that part of the market, this is actually the part that can benefit from the weaker pound that were seeing this morning. If you look at the oil balances, theyre improving. We know we have a swing from a sur flous a deficit early next year. And if thats the case, then its a twoway tail wind for the uk Energy Sector potentially. Jim . Heres i want to point out that were not paying any attention to the u. S. Economy. We had durable goods orders come out. Less than expected. New home sales werent so great yesterday. And next week is kind of light in dat yacha. The lightness of the data combined with brexit makes me stay on the sidelines right now. Its important to recognize there will be a big bounce. May not be the bounce or the final bounce before this whole thing ends. Im still worried about what we have to talk about all summer. John . Pick up that yellow metal, simon. Some of the gold. And play it. Thats going to help you. Its been a pleasure, guys. Thank you for the trades and analysis. Its a big day here on cnbc in the wake of the brexit vote. Now its time for power lunc. And we do welcome you. Im Bill Griffith live from the new york stock exchange. Im melissa live at cnbc headquarters. Stocks are close to session lows following that brexit vote. Take a look at the s p 500. Again, 2047. 2045 is the session low. The nasdaq really feeing most pain of the three major indices, down 3. 75 . Sectors, financials and materials are the worst performing. Financials and technology are the biggest weights on the s p 500 and that is what people are tc