MARKET SNAPSHOT: U.S. Stocks Set For Losses As Brexit Backlash Continues
June 27 2016 - 8:12AM
Dow Jones News
By Sara Sjolin, MarketWatch
Banks fall premarket
Wall Street was set for another downbeat session on Monday, as
shock waves from the U.K.'s Brexit vote last week continued to
chill the investing mood in global financial markets.
Futures for the Dow Jones Industrial Average dropped 151 points,
or 0.9%, to 17,096, while S&P 500 index futures fell 18.1
points, or 0.9%, to 2,000.50. Nasdaq 100 index futures lost 43
points, or 1%, to 4,219.25.
Read: S&P 500 could drop as much as 7% in Brexit swoon
(http://www.marketwatch.com/story/brexit-sparked-volatility-will-continue-to-weigh-on-us-stock-market-2016-06-25)
The losses follow a plunge on Friday, when investors shunned
anything considered a risky asset. The selloff came after the U.K.
unexpectedly voted to leave the European Union.
That vote sparked a drop of more than 650 points for the Dow
average at one point, before it trimmed losses to close 611 points,
or 3.4% lower. The Nasdaq Composite Index and S&P 500 index
lost 4.1% and 3.6%, respectively.
"There is little doubt that global monetary policy will have to
adjust to this historic decision, and with markets now pricing in a
50% chance of a July rate cut from the [Bank of England], the idea
of a [Federal Reserve] rate hike appears dead in the water," said
Joshua Mahony, market analyst at IG, in a note.
Fed Chairwoman Janet Yellen said ahead of Thursday's historic
referendum in the U.K. that a Brexit was one of the risks facing
the global economy that could justify a cautious approach to
raising interest rates. According to the CME Fed Watch tool,
there's currently a 0% probability of a Fed rate increase in
July.
Banking blues: Banks were among the biggest decliners in
Friday's Brexit-fueled selloff and were mostly set for more losses
on Monday.
Shares of Bank of America Corp.(BAC) lost 1.3% premarket, while
J.P. Morgan Chase & Co.(JPM) fell 0.9%, and Goldman Sachs Group
Inc.(GS) slipped 0.6%.
Other movers and shakers: U.S.-listed shares of Randgold
Resources Ltd.(RRS.LN) climbed 4.1% ahead of the bell as gold
continued to rise in a post-Brexit flight to safety.
Economic news: Data for May advance trade in U.S. goods come out
at 8:30 a.m. Eastern Time, followed by Markit's flash reading on
the U.S. services purchasing managers index for June, due at 9:45
a.m. Eastern.
There were no Fed speakers scheduled to talk on Monday. See:
Other markets: The pound was hit hard again
(http://www.marketwatch.com/story/pound-continues-to-slide-as-brexit-shock-waves-linger-2016-06-27),
sliding to a 31-year low of $1.3154 from $1.3676 late Friday in New
York. Sterling plunged to as low as $1.3230, the lowest since 1985,
early Friday after it became clear the U.K. had voted to exit the
EU.
The Brexit fallout continued to keep European stock markets
under pressure
(http://www.marketwatch.com/story/european-stocks-drop-to-4-month-low-as-brexit-fallout-continues-2016-06-27).
The Stoxx Europe 600 index was down 3.3%. The FTSE 100 index was
off 2%
(http://www.marketwatch.com/story/ftse-100-slides-as-brexit-continues-to-spook-traders-2016-06-27)
with the main British political parties, the Conservatives and
Labour, in turmoil after the referendum.
Stocks in Asia mostly rebounded
(http://www.marketwatch.com/story/nikkei-rebounds-post-brexit-leads-asian-stocks-higher-2016-06-27).
Japan's Nikkei 225 index rallied 2.4%, helping lead much of Asian
equities higher.
The dollar rose against most other major currencies, while oil
prices
(http://www.marketwatch.com/story/oil-prices-rise-as-dollar-strengthens-in-brexit-aftermath-2016-06-27)
moved lower.
The yield on 10-year U.K. government bonds dropped below 1% for
the first time
(http://www.marketwatch.com/story/uk-10-year-bond-yields-drop-below-1-for-first-time-ever-2016-06-27-591257)
ever on Monday.
(END) Dow Jones Newswires
June 27, 2016 07:57 ET (11:57 GMT)
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