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OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU16 -0.61%)
are down -0.67% and European stocks are down sharply
by -2.09% on concern the fallout from Brexit will slow global
economic growth. Late Tuesday, New York Fed President Dudley warned that the
risks from Brexit could escalate if it triggers turmoil beyond the UK. A
decline in European bank stocks is leading the overall market lower after
BlackRock downgraded European stocks to underweight, with a negative view on
the Eurozone banking sector due to fallout from Brexit. European stocks were
also undercut after German May factory orders came in weaker than expected. On
the positive side, mining stocks and gold producers are higher as the price of
gold (GCQ16 +1.22%)
rose to a 2-1/3 year high. GBP/USD is down -0.27% to a fresh 31-year
low, while global government bond yields fell further into uncharted territory.
The German 10-year bund yield slid to a record low of -0.205%, the UK
10-year gilt yield fell to a record low 0.729% and the U.S. 10-year T-note
yield dropped to a record low 1.318%. Asian stocks settled mostly lower:
Japan -1.85%, Hong Kong -1.23%, China +0.36%, Taiwan -1.61%,
Australia -0.58%, South Korea -2.05%, Singapore and India closed for
holiday. China's Shanghai Composite rallied to a 2-1/2 month high on
speculation the government will boost measures to spur economic growth in the
wake of the fallout from Brexit. Japan's Nikkei Stock Index fell to a 1-week
low as exporter stocks declined after USD/JPY slid to a 1-week low, which
reduces the earnings prospects of exporters.
The dollar index (DXY00 +0.04%)
is down -0.05%. EUR/USD (^EURUSD) is
down -0.05%. USD/JPY (^USDJPY) is
down -1.39% at a 1-week low.
Sep T-note prices (ZNU16 +0.18%)
are up +7.5 ticks at a 3-1/2 year nearest-futures high. The Total Investment & Insurance Solutions
BOE Governor Carney warned that the
risks from Brexit have started to crystalize and "there is the prospect of
a material slowing of the economy and that the number of vulnerable households
could increase due to a tougher economic outlook." The Total Investment & Insurance Solutions
German May factory orders were unch
m/m and -0.2% y/y, weaker than expectations of +1.0% m/m and +0.9%
y/y.
Key U.S. news today includes: (1)
weekly MBA mortgage applications (previous -2.6% with purchase
sub-index -3.0% and refi sub-index -2.4%), (2) May trade balance
(expected -$40.0 billion, Apr -$37.4 billion), (3) Fed Governor Daniel Tarullo
speaks at an event in Washington D.C. on financial regulation and monetary
policy, (4) revised Jun Markit U.S. services PMI (expected unchanged at 51.3,
prelim-Jun unch at 51.3), (5) Jun ISM non-manufacturing PMI (expected +0.4 to
53.3, May -2.8 to 52.9), and (6) minutes of the June 14-15 FOMC
meeting.
Russell 1000 companies reporting
earnings today: Walgreens Boots Alliance (consensus $1.14), MSC Industrial
Direct (1.00).
U.S. IPO's scheduled to price today:
none.
Equity conferences this week
include: none. The Total Investment
& Insurance Solutions
Netflix (NFLX +1.28%)
fell over 2% in pre-market trading after it was downgraded to 'Underperform'
from 'Hold' at Jeffries on subscriber growth concerns,
Royal Gold (RGLD +0.44%)
was upgraded to 'Buy' from 'Neutral' at Dundee with a 12-month price target of
$85. The Total Investment &
Insurance Solutions
Teledyne Technologies (TDY -1.64%)
was downgraded to 'Neutral' from 'Buy' at CL King with a 12-month target price
of $107.
Dow Chemical (DOW -1.57%)
was downgraded to 'Underperform' from 'Outperform' at CLSA. The Total Investment & Insurance
Solutions
U.S. Steel (X -3.45%)
was upgraded to 'Hold' from 'Sell' at Deutsche Bank.
Harley Davidson (HOG -10.84%)
was downgraded to 'Neutral' from 'Buy' at UBS.
Newmont Mining (NEM +0.10%)
and Coeur Mining (CDE +1.24%)
both are up over 2% in pre-market trading as the price of gold climbed to a
2-1/3 year high.
Biogen (BIIB -1.24%)
rose over 1% in after-hours trading on positive carryover from Tuesday's
decision by the European Commission to approve Biogen and Abbvie's Zinbryta for
treating relapsing forms of multiple sclerosis.
Ventas (VTR +0.83%)
said it will acquire a group of medical and life-science properties from
Blackstone Group LP for $1.5 billion.
Comcast (CMCSA -0.41%)
dropped over 1% in after-hours trading on negative carryover from Tuesday's
session when the company said it will incorporate Netflix's web-streaming
services from Comcast cable boxes.
Tesla (TSLA -1.16%)
slid over 1% in after-hours trading after the Detroit Free Press reported a
Tesla Model X was in Autopilot mode when it crashed and rolled over on the
Pennsylvania Turnpike on July 1.
Medivation (MDVN +2.73%)
gained over 1% in after-hours trading after Reuters reported that it is in
talks with Sanofi and other companies after it recently rejected a raised bid
from Sanofi. The Total Investment &
Insurance Solutions
September E-mini S&Ps (ESU16 -0.61%)
this morning are down -14.00 points (-0.67%). Tuesday's closes:
S&P 500 -0.68%, Dow Jones -0.61%, Nasdaq -0.60%. The S&P
500 on Tuesday closed lower on concern about Brexit fallout after Standard Life
Investments suspended trading in its 2.9 billion pound ($3.9 billion) fund
after seeing a surge in redemption requests. Stocks were also undercut by
weakness in energy producers after crude oil prices plunged -4.9%.
Sep 10-year T-note prices (ZNU16 +0.18%)
this morning are up +7.5 ticks at a 3-1/2 year nearest-futures high. Tuesday's
closes: TYU6 +26.00. FVU6 +11.00. Sep T-notes on Tuesday rose to a 1-week high
and closed higher, while the 10-year T-note yield fell to an all-time low of
1.354%. T-note prices were boosted by increased safe-haven demand with the
sell-off in stocks and by carryover support from a rally in UK gilts and German
bunds to all-time highs. T-note also received a boost from the slightly
weaker-than-expected U.S. May factory orders of -1.0% (versus
expectations of -0.9%). The Total
Investment & Insurance Solutions
The dollar index (DXY00 +0.04%)
this morning is down -0.052 (-0.05%). EUR/USD (^EURUSD) is
down -0.0006 (-0.05%). USD/JPY (^USDJPY) is
down -1.41 (-1.39%) at a 1-week low. Tuesday's closes: Dollar Index
+0.517 (+0.54%), EUR/USD -0.0078 (-0.70%),
USD/JPY -0.82 (-0.80%). The dollar index on Tuesday recovered from a
1-week low and closed higher on the decline in GBP/USD to a 31-year low and on
weakness in EUR/USD on concern over contagion of the Brexit crisis to the rest
of Europe. The dollar was undercut by safe-haven demand for the yen as USD/JPY
fell to a 1-week low. The Total
Investment & Insurance Solutions
Aug WTI crude oil (CLQ16 -1.33%)
this morning is down -59 cents (-1.27%) at a 1-week low. Aug gasoline
(RBQ16 -3.12%)
is down -0.0360 (-2.52%) at a 2-3/4 month low. Tuesday's closes:
CLQ6 -2.39 (-4.88%), RBQ6 -0.0848 (-5.60%). Aug crude and
gasoline on Tuesday closed sharply lower with Aug gasoline at a 2-1/2 month
low. Crude oil prices were undercut by the stronger dollar and by news that
OPEC June oil production rose +240,000 bpd to a 5-month high of 32.88 million
bpd.
The
Total Investment & Insurance Solutions
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