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    S&P500: Four-day decline in the index. Fundamental analysis as of 15.06.2016

    In advance of the forthcoming important events investors are cautious and prefer to buy gold, the yen and the USD, as well as government bonds as they are safe haven assets. Today, (20:00 GMT 2) US Fed interest rate decision will become known. It is expected that the rate will remain at the previous level of 0.5%. US stock indices have been declining for several consecutive sessions. The decline in the European indices is even more significant. StoxxEurope600 has lost 1.9%, and over the last five sessions the index dropped by 7.4%.

    Probability of the UK’s exit from the EU may create long period of uncertainty for the European assets. Economic recovery of Eurozone, which is slow now, will be undermined.

    Uncertainty about the forthcoming events of this week is also associates with the meeting of three important Central Banks (USA, UK and Japan). Ambiguous data on the state of the global economy, as well as the referendum on the UK membership in the EU increases demand for the safe-haven assets and force investors withdraw funds from the risky assets.

    At the end of Tuesday the index Dow Jones Industrial Average fell by 0.3% to 17674.82 points, S&P500 – by 0.2% to 2075.32 points, Nasdaq Composite - by 0.1% to 4843.55 points. The leaders of decline are the shares of the financial companies.

    The index S & P500 had declined on Tuesday for the fourth consecutive session, which was the strongest decline since February. Reduction in oil prices, which has also continued for the fourth consecutive session, leads to a decrease in price of shares of the US oil companies, composing this index. August futures for crude oil Brent at London's ICE fell in price to 49.07 USD per barrel, which is the lowest level since the beginning of June

    Spot price of gold in June has increased by 70 USD, up to 1285.00 USD per ounce, trying to reach recent highs near the level of 1300.00.

    The increased demand for government bonds leads to a decrease in their profitability. The yield on 10-year US Treasury bond fell to 1.611% from 1.616% on Monday; the yield on 10-year government bonds in Germany fell below zero (up to -0.027%) for the first time.

    It seems that global financial markets and stock indices will be under pressure of the negative sentiments among investors until the outcome of all forthcoming events will be known.



    S&P500: Four-day decline in the index. Fundamental analysis as of 15.06.2016


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