“It’s Scary, And I’ve Never Seen Anything Like It” – Where Markets Are The Morning After

For those of you who are just waking up, first of all, congratulations. Here is what you missed.

European, Asian stocks and S&P futures plummet, as U.K. votes to leave European Union membership. FX carry trades everywhere go haywire, with the Dollar and Yen spiking while the Cable overnight plunged to 30 year lows and at last check was trading just around 1.37, down 1,300 pips from yesterday’s highs. A modest rebound was experienced when first the Bank of England and shortly after all other central banks promised to pump virtually unlimited liquidity into the financial system. Ironically, all of this takes place a day after Fed’s stress tests showing all 33 banks exceed minimum requirements  – we may find out just how “unstressed” they are as soon as today.

For those who are pressed for time, the following quote from James Butterfill, head of research and investments at ETF Securities, summarized it best: “It’s scary, and I’ve never seen anything like it. We’re going to see outflows from basically any kind of cyclical asset. A lot of people were caught out, and many investors will lose a lot of money.”

Here are key market updates:

• S&P 500 futures down 3.9% to 2023
• Stoxx 600 down 7% to 322
• MSCI Asia Pacific down 4.1% to 125
• US 10-yr yield down 22bps to 1.53%
• Dollar Index up 1.86% to 95.27
• WTI Crude futures down 4.2% to $48.00
• Brent Futures down 4.3% to $48.70
• Gold spot up 4.2% to $1,310
• Silver spot up 2.8% to $17.77

TOP NEWS:

• U.K. Votes for Brexit as Cameron Resigns After Historic Rupture: Prime minister to step down as Johnson weighs next step
• Pound Plunges to 30-Year Low as U.K. Assets Slide on Brexit: ‘There are certain days you never forget,’ says HSBC’s Bloom
• Carney Pledges $345 Billion to Fund First Line of Brexit Defense: Markets bets on a July interest rate cut climb to 50%
• Nationalist Parties Seize on Brexit to Demand Own EU Referendums: Le Pen, Wilders, Northern League call for vote
• Biggest U.S. Banks Seen Weathering Severe Stress in Fed Test: Regulators release results of Dodd-Frank mandated exercise
• Oil Tumbles After Brexit Vote as Traders Assess Lasting Impact: WTI, Brent down >6.6% as traders flee risky assets
• Gold Sees Biggest Gain Since 2008 in Rush for Havens From Brexit: Sterling-denominated gold jumps 15%, the most ever
• Xerox Appoints Jeff Jacobson as New Chief After Co. Split: Jacobson named as incoming CEO of document technology seller
• Albemarle, Fortive to Join S&P 500; Emcor Named to MidCap 400: Changes to be implemented after close of trading June 30

WHAT HAPPENED IN EUROPEAN MARKETS:

More…