“We’ve had Yellen and other Fed officials speak to us about the strength of the economy since the April meeting, and if you read the release today, they basically pushed the spaghetti around the plate -- the strengths and weaknesses in the economy just shifted,” said Anna Rathbun, director of research for CBIZ Inc.’s retirement-plan services unit in Cleveland. “This isn’t good news, this is status quo. So the rate hike not coming means we haven’t gone anywhere, and as an investor, I don’t find that encouraging.”

Equities have retreated this week as the potential fallout from Britain’s June 23 referendum spooked investors, just days after optimism over low rates and moderate economic growth buoyed the S&P 500 to an almost 11-month high.

David Fuller's view

Anne Rathbun’s comment that the Fed “basically pushed the spaghetti around the plate”, summarises the lack of enthusiasm which snuffed out today’s modest rally on Wall Street.  With the UK’s influential Brexit Referendum on the 23^rd, buyers for any reason other than short covering have an excuse for sitting on the sidelines, at least until they see the result.   

What are investors likely to buy post Brexit?

Historically, the combination of recovering commodities, albeit potentially susceptible to some mean reversion towards the MA, and stalled stock markets has been inauspicious for the latter, as we last saw in 2007.  However, I think there is little reason to fear a repeat 2008’s meltdown, without the presumably small risk of a serious exogenous crisis.  The probability is a further period of primarily ranging stock markets as this service has mentioned for a number of months, plus an additional recovery by resources.

In the event of a Brexit vote on the 23^rd we may see an oversold buying opportunity in July and August.  Some of the least expensive multinational shares would be in Europe, including the UK.