Wall Street Set To Start Central Bank-Heavy Week Lower
New York (Jun 13) Wall Street looks set to extend the losing streak to three days, as the major US index futures point to a notably lower start on Monday. Asian stocks sold off, with Japan , China and Hong Kong all tumbling, while the European markets also got off to a negative start. Central banks of the US, Japan , the UK and the Swiss National Bank , are all scheduled to discuss monetary policy this week.
None of these banks is expected to announce any radical measures, although the Bank of Japan could expand its stimulus, given the bank's pre-occupation about the developments overseas and the domestic economy's fight with deflation. Commodities are firmer, expect oil, which is up moderately. The dollar is slipping but the pound is getting hit from Brexit concerns. The domestic markets have very little corporate and economic catalysts to drive trading.
As of 6:15 am ET , the Dow futures are down 63 points, the S&P 500 futures are receding 8 points and the Nasdaq 100 futures are slipping 18.75 points.
US stocks ended the week ended June 10th mostly lower, as oil prices and rate hike expectations being the dominant theme in the markets for all of last week.
On the economic front, Activity on Main Street picks up slowly in the unfolding week, with the 2-day FOMC meeting unquestionably the most sought after event of the week. A June rate hike is not off the tables and the fact could accord more importance to the FOMC policy statement, Chair's press conference and the FOMC forecasts.
Traders may also focus on the Commerce Department's retail sales data for May, due on Tuesday, the results of separate manufacturing surveys for June by the New York Federal Reserve and Philadelphia Federal Reserve, the Federal Reserve's industrial production report for May, the weekly jobless claims report, the National Association of Home Builders' housing market index for June, the Labor Department's consumer price index for May and the Commerce Department's housing starts report for May.
The Commerce Department's business inventories report for April, the Labor Department's export and import prices and producer price inflation reports, both for May, and announcements concerning the Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.
In major corporate news, Symantec (SYMC) announced a deal to buy privately held Blue Coat for USD4.65 billion in cash. The deal is expected to close in the third quarter of 2016. Blue Coat's CEO Greg Clark is to be appointed as the CEO of Symantec after the closure of the deal. The company also said it expects its 2018 non-GAAP earnings to be USD1.70-$1.80 , including USD150 million in run-rate cost synergies plus USD400 million in previously announced net cost savings.
Dr. Reddy's (RDY) announced an agreement with Teva (TEVA) and an affiliate of Allergan (AGN) to buy a portfolio of eight ANDAs in the US for USD350 million in cash at closing. The portfolio pertains to products divested by Teva as a pre-condition to the closing of its acquisition of Allergan's generic business.
The major Asian markets retreated, with the Japanese, Chinese and Hong Kong markets plunging steeply. A multiplicity of factors, including the Fed rate hike worries and the Brexit threat weighing heavily on the markets. The Australian market was closed for a public holiday.
The Japanese market tumbled as the yen firmed up towards the lower 106-yen level against the dollar. The Nikkei 225 average ended down 582.18 points or 3.51% at 16,019.
Hong Kong's Hang Seng Index closed 529.65 points or 2.52% lower at a 2-week low of 20,513 and China's Shanghai Composite plunged 94.09 points or 3.21%, ending at 2,833.
On the economic front, the National Bureau of Statistics released a trio of data, showing softening of growth. Industrial output rose 6% year-over-year in May, in line with expectations and the same rate of increase as in April. Retail sales growth slowed to 10% from 10.1% in the previous month, while economists expected the rate to match with April's. Fixed asset investment rose 9.6% for the 5-month period, shy of the 10.5% growth expected by economists.
The Chinese Commerce Department reported that foreign direct investment in China fell 1% year-over-year in May.
Sentiment among large manufacturers in Japan worsened in the three months ended June, while the future situation is expected to improve, the quarterly survey by the Ministry of Finance and the Cabinet office showed. The Business Survey Index dropped to -11.1 in the three-month period to June from -7.9 in the previous three months.
European stocks opened lower, with the German and French market trading notably lower, while the UK market is experiencing a moderate loss. A bevy of central bank decisions due for the week could keep the traders nervous. The region faces another major risk in the form of Brexit, with the referendum to decide on the fate of Britain with respect to its position in the EU, scheduled for June 23rd .
In major corporate news, G4S stock took a beating after it was revealed that Omar Mateen , the gunman behind the Orlando mass shooting, has been employed by G4S since September 10th, 2007 .
Source: RTTnews
