Here's what Wall Street is saying about Brexit

Published Fri, Jun 24 201611:17 AM EDT

Wall Street strategists were out in force Friday morning as the U.S. stock market nosedived on the U.K.'s Brexit decision, recommending clients buy defensive stocks and wait for a buying opportunity in emerging markets. Here's the best of what Wall Street told clients to do on the back of the news: Bank of America: Analysts at the Bank of America believe that because of the vote the Fed will delay raising interest rates in an already low interest rate environment. "We expect the Fed to wait until December to hike followed by two hikes next year in June and December. We are simply pushing out our forecast trajectory by a quarter," said Bank of America economist Ethan S. Harris. Deutsche Bank: Deutsche Bank analysts believe the U.S. market will struggle ahead because of the developments in Europe, continuing its sideways trading this year. If the U.K. Parliament backs the vote, "under this scenario, the S & P is likely to fall a high-single-digit percentage from its recent 2,120 high or down to about 1,950. It is important to keep an eye on oil prices and the reaction of other global currencies, particularly YEN and CNY to the dollar. Significant moves in these currencies could elicit uncertain policy responses," said Deutsche Bank's David Bianco. Citibank: Citibank recommends clients stick with safety plays like gold, utilities and telecom names. "Safe haven investing could dominate in the near term as investors seek protection in Treasurys, gold, defensive stocks such as staples, utilities and telecom services. In addition, one could see selling more cyclical areas of the market, which seems inappropriate given industrial production being likely to rebound in the U.S. year over year in the next few months and valuation of so-called defensive assets looks quite stretched," Citigroup's Tobias Levkovich said. UBS: Similar to Bank of America, UBS predicts the U.S. will see lower interest rates for a while longer. This delay is an opportunity to "buy into the weakness" of emerging markets, said the investment bank. "Another likely delay in Fed tightening should, before long, put a floor under EM (emerging market) equities and other risk assets. It is not quite 'buy the dip' (in EM) after the vote — as it may be a significant 'dip' — but we think investors should look for an opportunity to buy into weakness before too long and to raise their weights again in higher-risk, higher-beta EM equities," said Geoff Dennis of UBS. Growing earnings expectations "keep the bull intact" in the future, UBS added in a separate note. "While yesterday's 'Leave' vote may weigh on sentiment in the near term, it is unlikely to result in a change in the fundamental outlook for U.S. equities. U.S. corporate earnings growth, which appears to have bottomed in Q1, is expected to rise into the second half of the year as margins remain elevated and the U.S. economic environment continues to improve," said Julian Emanuel of UBS. — CNBC's Michael Bloom contributed to this story.

Traders from BGC, a global brokerage company in London's Canary Wharf react as European stock markets open early after Britain voted to leave the European Union.

Russell Boyce | Reuters

Here's the best of what Wall Street told clients to do on the back of the news: