Bank stocks are getting clobbered
Citigroup and Bank of America are down nearly 8% in pre-market trading; Goldman Sachs is off about 7% and JPMorgan Chase and Wells Fargo are both down more than 6%.
The Euro Stoxx Banks index is off more than 16% in the wake of the vote, with Europe's biggest lenders logging their biggest decline on record.
In London, banking stocks also bore the brunt of hte market crash. Soon after the open all of Britain's biggest financial firms crashed, with losses of as much as 30% for the country's most important banks. Since the open, and soothing comments from Bank of England governor Mark Carney, bank stocks have rebounded a bit, but some losses are still in excess of 20%.
Here's Barclay's around midday in London:
S&P 500 Futures are down 3.8%, and European and Asian benchmarks are all sharply lower. The Euro Stoxx is down 8.4% to its lowest level since February while the pound dropped more than 11% at one point to a 30-year low against the dollar.
For the US banks, the Brexit vote creates two problems. Uncertainty around the impact of the decision, as the UK begins a complicated process of removing itself from the EU could hit their trading businesses. This volatility could also have broader economic implications.
"Even for countries with a relatively low trade exposure, heightened volatility and uncertainty are likely to lead to weaker growth through delayed investment and consumer spending and weaker employment," HSBC economists wrote in a note Friday.
At the same time London is a key financial center, and an overseas hub for the big Wall Street firms.
JPMorgan's Chief Executive Jamie Dimon wrote in a memo to staff that the bank has 16,000 employees in London and that the bank might have to make changes to its "European legal entity structure and the location of some roles."
Even UK-based banks will have to address changing rules over employment. EU membership has meant that UK companies could employ citizens of other European nations without restriction. Barclay's CEO Jes Staley addressed the concerns of these employees have now, writing in a memo that:
"For those of you who are not UK nationals, but based in the UK, I know that the vote to leave may also raise questions about your own future. I do not pretend to have the answers but I know that our people are the lifeblood of Barclays, regardless of where they're from, so we will do all we can to support you."