Brexit apparently wasn't what it was cracked up to be.
Rather than the major disruptive factor to the global economy and financial markets that was expected, the decision by Britons to exit the European Union has had a decidedly muted effect.
- The International Monetary Fund, in what some considered a significant change of stance, said this week that Brexit likely would not put an additional major dent into the already slowing global growth picture.
- Stock averages in the U.S. have notched a string of record closes, and commodity, currency and bond markets all have returned to a sense of relative calm after the sharp reaction that immediately followed the vote. Moreover, about 1 in 6 new hedge funds that opened in the second quarter were focusing on opportunities in Europe.
- Perhaps most surprisingly, there's optimism that the appetite for deals in the U.K., after slumping in the second quarter, could rebound now that the Brexit smoke is clearing.
"People view the post-Brexit uncertainty and how it's going to shake out as just another uncertainty in the market, but not one that's going to take precedence over a lot of other issues," Andy Wilson, U.S. head of the U.S.-U.K. M&A Deal Corridor at Deloitte, said in an interview.
"The U.K. and U.S. are sophisticated markets," he added. "Sure, there are going to be lots of details to hammer out, but everyone is fairly certain they're going to get hammered out in a way that's not going to disrupt the economies of the major players."
First-half activity, particularly in deals targeted for the U.K., declined precipitously after several years of strength. Deal dollar volume tumbled 47 percent from the first quarter, with the $50.1 billion of total inbound deal activity representing a decline of 66 percent from the same period in 2015, according to data tracker Dealogic.