Tuesday's Market Recap - Uncertain About US China Trade, & FOMC Rate Stance Send Markets Low
What is The Premarket Telling Us?
7:00 AM.
Stock futures are modestly negative with Dow futures down 37 points, Nasdaq futures down 24 points, and the S&P down 6 points.
On The Bond Desk:
The US 10 Year Bond Yield at 2.02%, down 0.05%
Currency Desk:
Euro dollar:1.13
UK Pound: 1.27
Crude Oil:
WTI crude oil futures at $57.53/barrel, down 0.64%.
On the Earnings Calendar:
FedX and Micron, report after the closing bell this evening.
In M&A News:
A big merger was announced in the big pharma, this morning. Following Bristol Myers deal to buy Celgene, and Pfizer's deal to buy Array Pharma, a few weeks ago, Abbvie is buying Allergan in a cash and stock deal worth $63 Billion. A 45% premium above yesterday's close.
What About The Asian And European Markets?
Major Asian markets were all lower overnight. Japan (Nikkei 225) lost 0.43%, Shanghai fell 0.87%, Hong Kong (Hang Seng) declined 1.15%.
Major European markets were mixed. German (DAX) down 0.38%, France CAC 40 down 0.13%, London FTSE 100 up 0.8%.
Market And Sector Dynamics
Stocks opened the trading day mostly flat. The Dow gained 16 points, Nasdaq up 1 point, and S&P up 1 point. WTI crude oil also moved 0.22% higher early, at $58.02/ barrel.
Investors are not sure how to interpret today's big merger, Abbvie's bid for Allergan. Shares of Abbvie are down, while Allergan traded higher, suggesting Abbvie shareholders may not be happy with the deal.
Markets turned lower just after the close on comments from Boullard, a voting member of the FOMC who suggested that anticipating a fifty basis point interest rate cut, which the markets may have been expecting, would be excessive. Market sold off on that news, but bounced off those lows around noon and early afternoon session, but was unable to hold on to those gains, falling even lower shortly before the close of trading.
Today's selloff was broad based and orderly. All eleven S&P sectors closed with losses, in the session, led by Technology, Communication Services, Real Estate, Consumer Discretionary, Energy, Industrials, Utilities, Healthcare, and Financials.
Factors Influencing Today's Market
Big Pharma merger. Abbvie $63 billion bid for Allergan
Creeping doubt that the FOMC may not give markets the fifty basis point cut it's demanding, in July.
US China Trade War concerns, as the President plans to meet with President Xi at G20 in Japan.
Consumer Confidence for June came in worst than expected at 121.5 vs 132 estimates, suggesting consumers are becoming concerned about their own economic outlook.
New Home Sales came in weaker than expected at 626K vs 680K estimated
Market Close Volume Traded And Advance Decline Ratio
When trading ended the Dow sank 179.32 points, Nasdaq lost 120.98 points, and the S&P lost 27.97 points. Total NYSE volume traded, a moderate 3.58 billion shares. Declining shares outpaced Advancing shares better than 2:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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