Morning Spread

Morning Spread

Monday 27th June 2016
IndexLevelChg (%)
UK Market6050.60-1.43
Dow Indust Avg17400.75-3.39
S&P 5002037.41-3.59
Nasdaq Composite4707.98-4.12
Nikkei 22515309.21+2.39
Hang Seng20227.30-0.16
IndexLevelChg (%)
Nymex 1m47.65+0.02
Gold Spot1326.40+0.83
GBP/USD1.3354+2.38
GBP/EUR1.2088-1.91
EUR/USD1.1045-0.65
USD/JPY102.00+0.22

European stocks fell as investors continued to speculate on the fallout from Britain’s shock vote to leave the European Union. The ESTX 50 (-0.66%), CAC 40 (-0.81%), Dax (-0.87%) and the UK markets (-1.15%) all posted losses in early trading. Chancellor of the Exchequer George Osborne sought to reassure financial markets by saying that a contingency plan is in place to shore up the UK economy. Royal Bank of Scotland Plc lost -14% and Barclays Plc slid -9.2%. EasyJet tumbled -16% after warning that a drop off in travel demand arising from a Brexit will pare earnings over the rest of the summer period. Volvo AB fell -8.4% after saying it increased its provision for a possible European commission fine for suspected vehicle cartel.

US stocks dropped on Friday as the investors digested what the effects of the UK leaving the European Union would mean for the US economy. The Dow Jones Industrial Average (-3.39%), S&P 500 (-3.59%) and the Nasdaq Composite (-4.12%) all dropped. As measured in real economic terms, a Brexit shouldn’t actually be all that bad for the US. The UK accounts for only a small portion of US exports, less than 3% pf the combined revenue of all the companies in the S&P 500. Europe in general makes up a bigger portion, and the economic consequences of Brexit for the rest of the EU will likely be limited, at least in the immediate future. Of the stocks in the Dow Jones Industrial Average only one, Walmart (+0.19%) was up. Of the others that were down, the worst performer was Goldman Sachs (-7.07%), followed by Caterpillar (-4.5%).

Asian stock rebounded after last week’s British vote to leave the European Union roiled global markets. The S&P/ASX 200 (+0.47%) and the Nikkei 225 (+2.39%) both advanced, while the Hang Seng (-0.16%) was slightly down. Rallies in Japan and China overshadowed declines in other regions. The rally on Japan was led by so called defensive shares. Yamazaki Baking Co climbed +7.6%, Japan Tobacco Inc rose +5% and Astellas Pharma Inc advanced +6.6%. But the fallout from the Brexit vote continued to hit exporters. Toyota Motor Corp slid -1.7% after plunging -8.7% on Friday. Mazda Motor Corp plunged -9.7% after Nomura cut its rating on the company, citing a slowdown in the European car market and a stronger yen.