US : 6 things to know before the market opening – 06 Jul 2016
06 Jul 2016 : Here are the six things you need to know before the opening bell rings in New York:1. Pound gets pounded, again: The British pound has taken a further beating overnight. At one point it dropped to $ 1.28, its lowest level in 31 years, but then steadied to trade around $ 1.29.
Investors have been dumping the pound following Britain’s vote to leave the European Union on June 23, which has led to a huge amount of political and economic uncertainty in the country.
The pound has dropped as much as 15% since referendum day, when it was trading at $ 1.50.
Many analysts expect the pound to fall further as the U.K. economy slows. Kit Juckes, a strategist at Societe Generale, said his bank’s medium term target for sterling is $ 1.23.
2. International markets overview: There’s an overall negative tone in stock markets this morning and investors are turning to safe-haven assets like gold, which is trading at its highest level since early 2014.
U.S. stock futures are all slipping and all major European markets are dropping in early trading. In London, mining stocks are surging, but shares in supermarket companies and home builders are on the ropes.
Shares in one London-traded miner, Fresnillo, are about 5% higher. Its shares have rallied by about 60% since Britain voted to leave the EU. Companies mining commodities priced in dollars are getting a boost from the falling pound.
Asian stock markets ended the day with mixed results. The Nikkei plunged during the day but then recovered a bit, closing with a loss of 1.9%.
Related: Fear & Greed Index
3. Following the Fed: The U.S. Federal Reserve is releasing the minutes from its latest monetary policy meeting at 2 p.m. ET. The meeting took place in the middle of June.
During that meeting, the central bank decided to keep interest rates steady, in part due to concerns about the upcoming Brexit vote in the U.K.
Sweden’s central bank cut its 2017 growth forecast on Wednesday and pushed back the timing of a future rate hike, citing uncertainty about the economic outlook sparked by the U.K. vote.
4. Ban on short selling: Italian market regulators have temporarily banned short selling of shares in Banca Monte dei Paschi di Siena. Italian bank stocks have been crushed this year by growing concern over bad debts.
Banca Monte dei Paschi di Siena has dropped from above 86 euros in 2007 to around 0.29 euros per share.
5. Earnings: Walgreens Boot Alliance (WBA) is the key company reporting earnings ahead of the opening bell.
Related: CNNMoney’s Tech30
6. Tuesday market recap: It was a negative day in the markets on Tuesday. The Dow Jones industrial average dropped 0.6%, the S&P 500 declined 0.7% and the Nasdaq dropped 0.8%.
