Thursday, 30 June 2016

Markets rise as Brexit concerns fall

Global stocks rose for a second day on Wednesday.

The MSCI All-Country World Index rose 2.2 percent, bringing its two-day gain to 3.9 percent.

The S&P 500 rose 1.7 percent for a two-day gain of 3.5, erasing its loss for the year in the process.

The STOXX Europe 600 Index surged 3.1 percent. It has recovered 4.7 percent of the 11 percent loss over Friday and Monday.

The FTSE 100 Index erased its post-Brexit plunge with a 6.3 percent surge over the past two sessions as the pound extended its rally from a three-decade low on Monday.

Oil rose, with West Texas Intermediate crude rising 4.2 percent.

Yields on US 10-year Treasuries rose five basis points to 1.52 percent after falling on Monday to their lowest point in almost four years.

“It’s looking increasingly likely that the worse-case scenario, which is what markets initially reacted to, is not the most likely case,” said Brad McMillan, chief investment officer of Commonwealth Financial Network in Waltham, Massachusetts.

Thursday, 23 June 2016

Stocks mixed as traders hedge on Brexit vote

Stocks were mixed on Thursday.

The S&P 500 fell 0.2 percent and the Nikkei 225 fell 0.6 percent but the STOXX Europe 600 rose 0.4 percent while the Shanghai Composite Index rose 0.9 percent.

Investors on Wednesday remained focused on the UK referendum on whether to leave the European Union.

“Players on both sides of the Atlantic continue to hedge going into the ‘Brexit’ vote,” said Tom Carter, managing director at JonesTrading.

Wednesday, 22 June 2016

Stocks gain as UK vote approaches

Most stock markets rose on Tuesday as the UK’s referendum on whether to leave the European Union drew closer.

The S&P 500 rose 0.3 percent, the STOXX Europe 600 rose 0.7 percent and the Nikkei 225 rose 1.3 percent but the Shanghai Composite Index fell 0.4 percent.

The yield on the 10-year US Treasury note rose to 1.699 percent from 1.670 percent on Monday.

“Investors aren’t willing to commit to anything ahead of the referendum,” said Remi Olu-Pitan, multiasset fund manager at Schroders.

However, Dennis Gartman thinks that the uncertainty surrounding the UK vote makes the US stock market the "only place to go".

Tuesday, 21 June 2016

Global stocks rise as Brexit fears recede

Stocks surged on Monday as concerns over the UK's exit from the European Union receded.

The S&P 500 rose 0.6 percent, the STOXX Europe 600 surged 3.6 percent and the Nikkei 225 jumped 2.3 percent.

The yield on the 10-year US Treasury note rose to 1.670 percent from 1.616 percent on Friday.

“It’s a reassessment of risk, clear and simple,” said Tom Carter, managing director at JonesTrading.

Indeed, Bryan Rich thinks that a UK exit from the EU is “not going to happen” and “that should clear the way for broad global stock market rallies and a sharp bounce back in yields”.

Monday, 20 June 2016

No panic over Brexit

As the referendum on 23 June on the UK's secession from the European Union approaches, and despite the market volatility of the past week, analysts are not predicting anything dire for stock markets.

From Bloomberg:

Even as global markets teetered last week and polls showed more U.K. voters leaning toward leaving the trading bloc, securities firms surveyed by Bloomberg are predicting the outcome will be largely a non-issue for equities. They’ve left practically untouched predictions that European shares will rise almost 10 percent through the rest of the year.

It is a similar situation for the US stock market.

Citigroup’s Tobias Levkovich noted in a recent report: “With Europe directly accounting for 9% of S&P 500’s constituent sales, of which a good chunk comes from stable businesses in areas like food, drugs and beverages, a Brexit vote is unlikely to be disruptive.”

A recent FactSet report estimated that the overall S&P 500 index has a mere 2.9 percent sales exposure to the UK, with even the most exposed sector having 6 percent of sales coming from the UK.

Saturday, 18 June 2016

Stocks mixed but down for week

Stocks ended a rocky week on a mixed note on Friday.

The S&P 500 fell 0.3 percent to end the week down 1.2 percent.

The STOXX Europe 600 jumped 1.4 percent but still finished the week down 2.1 percent.

The Nikkei 225 rose 1.1 percent but ended the week 6 percent lower, its worst weekly performance since February.

“At this point, people are going to stay where they are,” said Ryan Kelley, a portfolio manager at Hennessy Funds.

“The last thing investors are willing to do is stick out their neck on geopolitical risks in a market they already feel is a bit long in the tooth,” said David Lafferty, chief market strategist at Natixis Global Asset Management.