Wall Street Set For Free Fall As Britons Choose Brexit

WASHINGTON (Alliance News) – Early indications suggest that Wall Street stocks may open notably lower on Friday, as traders are shaken by an unexpected verdict thrown up by the UK’s EU referendum. Britain leaving the EU would have widespread ramification for the U.K as well as the global economy. The U.K is set to see a political transition as Prime Minister David Cameron has announced his decision to quit. This turmoil has come at a time, the global economy is going through an unsteady recovery.

As of 6:15 am ET, the Dow futures are plunging 521 points, the S&P 500 futures are slumping 79 points and the Nasdaq 100 futures are receding 164 points.

US stocks rallied strongly on Thursday amid expectations that the UK’s EU referendum will produce a favorable outcome.

The Commerce Department is scheduled to release its durable goods orders report for May at 8:30 am ET. Economists expect durable goods orders to have declined by 0.7% month-over-month. Excluding transportation, orders may have remained unchanged.

The University of Michigan is set to release its final US consumer sentiment index for June at 10 am ET. Economists expect the index to be downwardly revised to 94 from 94.3.

In major corporate news, Sonic (SONC) reported below-consensus adjusted earnings and revenues for its third quarter and the company guided 2016 adjusted earnings per share growth to 20-25%.

Standard & Poor’s announced that Albermale (ALB) will replace TECO Energy (TE) in the S&P 500 Index. S&P SmallCap 600 constituent EMCOR Group (EME) will replace Albermale in the S&P 400 Index. Inteliquent will replace EMCOR in the S&P SmallCap 600 Index after the close o trading on June 30th.   With early results from the referendum pointing to victory for the ‘leave’ camp, Asian markets plunged steeply. The selling pressure was broad based, as weakness in risk assets such as commodities and strength in safe havens such as gold also produced secondary weakness.

The Japanese market slumped, as the yen rallied to a near a 2-year high. At one point, the yen strengthened below the 100 yen-level against the dollar.

The Nikkei 225 average that traded nervously till early afternoon trading fell steadily until late trading and moved roughly sideways around the lower levels for the rest of the session. The index ended down 1,286.33 points or 7.92% at 14,952, its lowest level since June 2nd, 2014. All index components retreated in the session.

Australia’s All Ordinaries held barely above the unchanged line in early trading, retreated into negative territory and languished deeply in the red. The index ended 165.80 points or 3.09% lower at over a 2-month low of 5,193. Energy, financial, IT and material stocks plunged steeply.

Hong Kong’s Hang Seng Index closed at 20,186, down 682.68 points or 3.27% and China’s Shanghai Composite Index fell 37.67 points or 1.30% before ending at 2,854.

On the economic front, the Bank of Japan released its corporate service price index rose 0.2% year-over-year in May, ahead of the 0.1% increase expected by economists. On a monthly basis, the index was unchanged following a 0.1% drop in April. European stocks plummeted at the open, with the major averages in the region currently down notably, as Britain voted to exit the EU. The pound plunged to over a 30-year low.

In major corporate news, Henkel announced a deal to buy laundry and homecare company Sun Products from Vestar Capital Partners for 3.2 billion pounds.

On the economic front, the results of a survey by the IfO Institute showed that business sentiment in Germany came in better than expected. The business confidence index was at 108.7 in June, while economists expected a reading of 107.4. The current conditions index and the expectations index were also better than expected.

The French economic growth improved in the three months ended March, as initially estimated, latest figures from statistical office INSEE showed. GDP advanced 0.6% quarter-over-quarter in the first quarter, confirming the second estimate, and followed a 0.4% expansion in the previous quarter.

Copyright RTT News/dpa-AFX

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