US stocks fell on Monday ahead of Federal Reserve June 14-15 policy meeting with investor confidence undermined by uncertainty about global economic outlook and Brexit concerns. The dollar hit a five-week low against the yen as investors sold riskier assets and bought haven assets like gold and the Japanese currency. The live dollar index data indicate the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, slipped 0.2% to 94.379. The Dow Jones Industrial Average ended 0.7% lower at 17732.48 led by a 2.6% loss in Microsoft on news the software giant plans to purchase LinkedIn Corporation in an all-cash deal valued at $26.2 billion. LinkedIn shares jumped 47%. The S&P 500 closed 0.8% lower at 2079.06 with materials and tech stocks leading the decliners. The Nasdaq Composite Index lost 0.9%. There were no positive economic data that could boost market sentiment ahead of Federal Reserve meeting where policy makers are expected to leave the rates unchanged after a disappointing May jobs report while expressing their support for a July rate hike. Today at 14:30 CET May Advance Retail Sales and Import Prices will be released. The tentative outlook is negative. At 16:00 CET Business Inventories for April will be published. The tentative outlook is positive.
European stocks fell to more than three-month lows on Monday as investors worried about the possibility the United Kingdom might leave the European Union after polls over the weekend didn’t provide a clear lead for supporters of continued EU membership. The euro strengthened, rising to $1.1292 late Monday in New York compared with $1.1254 late Friday. The Stoxx Europe 600 lost 1.1%. The decline in bond yields continued as investors bought safe government bonds while selling riskier equities. Bank shares were among the top decliners together with stocks of auto makers with lower interest rates hurting the profit outlook for financial institutions. German DAX 30 index fell 1.8% to end at 9657.44, the lowest close since April 8. France's CAC 40 ended 1.9% lower, UK’s FTSE 100 index slipped 1.1%. Commodity and miner stocks also ended lower as oil retreated. Today at 10:30 CET May Consumer Price Index will be released in UK. The tentative outlook is positive for Pound. At 11:00 CET today first quarter employment change and May industrial production will be released in euro-zone. The tentative outlook is positive for euro.
Asian stocks are retreating today with investors awaiting the results of central bank policy meetings amid concerns about UK’s future membership in EU. The Bank of Japan meets on June 15-16 and Bank of England releases its interest rate decision June 16. Nikkei fell 1% today with exporter stocks extending losses as continued strength of yen against the dollar hurt the competitiveness of Japanese exporters. Bank shares were also hit as interest rates edged lower. Chinese stocks are recovering with Shanghai Composite Index up 0.35% after heavy losses on Monday as investors await the MSCI’s decision today in the evening on whether it includes Chinese stocks in its Emerging Markets Index.
Oil futures prices are tracking lower today on growing concerns about lower demand due to slower global growth when the number of active rigs drilling for oil in US rose for the second straight week according to Baker Hughes Friday report. August Brent crude fell 0.4% to $50.35 a barrel on London’s ICE Futures exchange on Monday.