“The ‘Leave’ outcome is a setback for growth in Britain, Europe and around the world at a time when economies are generally struggling. Not a good sign for markets for the rest of the year,” writes Blackstone strategist Byron Wien in a recent article for Barron’s.

Wien references the opinion of Bard economic historian Walter Russell Mead, who believes that Brexit and nationalism are generally born of a “systemic crisis” related to:

• Economic vulnerability of the Eurozone;
• Middle East refugee crisis and fear of terrorism;
• Russian aggression.

Wien visited Europe last month to meet with investors and discuss market uncertainty. The upcoming presidential election in the U.S. is causing concern, and he “I didn’t find anyone who was enthusiastic about any asset class.” He believes that populism has created confusion on “both sides of the Atlantic” which has made asset allocation a difficult exercise for European portfolio managers. The greatest worry, Wien writes, is around the consequences if the world slips back into a recession. While he believes central banks dealt effectively with the financial crisis of 2008-2009, he contends there’s no guarantee they could do so again.

Other takeaways from Wien’s meetings overseas include:

• The general thinking in Europe is that growth is slow but “okay”;
• Europeans are very worried about political instability in the Middle East leading to a rise in oil prices;
• There isn’t much appetite for investment in China;
• Greece will continue to be a drain on Europe, and Europeans question how long stronger countries will continue to support the weaker ones.

The strategist found himself framing the investment outlook by suggesting that if real global growth as well as inflation were 2% and productivity were 1%, potential returns weren’t going to be more than 5%. “Everywhere I went,” Wien reports, “investors pleaded with me to suggest an asset class where they could get double-digit returns. When I told them that future nominal returns from public equities were more likely to be closer to 5% than 10%, they were disappointed but understood my reasoning.”