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Jun 14, 2016

U.S. Stock Market Future Indications, by MarketWatch on June 14, 2016: Stock Futures Fall With Fed Meeting, "Brexit" in the Spot


 
Anora Mahmudova, Carla Mozee
 
U.S. stock futures sagged Tuesday, indicating Wall Street could face a fourth straight loss, as investors remained on edge over a Federal Reserve policy meeting and the coming U.K. vote on membership of the European Union.

Market reaction to better-than-expected retail sales was muted.
Futures for the Dow Jones Industrial Average YMU6, -0.27%  were down 45 points, or 0.3%, to 17,595, futures for the S&P 500 ESU6, -0.30%  were off 5 points, or 0.3%, to 2,064. Nasdaq-100 futures NQU6, -0.33%  lost 13 points, or 0.3%, to 4,405.
The moves came after the S&P 500 SPX, -0.81%  and the Dow DJIA, -0.74%  on Monday each finished at their lowest close since May 24. The S&P 500 lost 0.8% to 2,079.06, while the Dow fell 0.7% to 17,732.48. The Nasdaq Composite COMP, -0.94%  lost 0.9% to close at 4,848.44, its lowest finish since May 23.
Investors are still showing signs of anxiousness about the Federal Reserve’s two-day meeting, which starts Tuesday, and about the outcome of the U.K. “Brexit” referendum.
Fueling the uncertainty around the vote are opinion polls that have shown support for “leave” and “remain” at neck-and-neck. Some surveys are suggesting growing support for an “out” vote at the June 23 referendum.
“A big spike in the volatility index VIX yesterday is indicative of a lot of uncertainty in the market and investors preparing for the worst. If U.K. stays in the European Union then the there is very limited upside for stocks, because essentially it’s just a status quo. If they vote to leave, there is a lot of room for downside,” said Randy Frederick, managing director of Trading & Derivatives at Schwab Center for Financial Research.
Read: As Brexit polls shift, investors should brace for turmoil
Investors have been moving into the fixed-income market on a hunt for safety ahead of the EU referendum, putting pressure on government bond yields. On Tuesday, the German 10-year bund TMBMKDE-10Y, -116.25%  yield turned negative for the first time, hitting minus 0.003%.
Oil prices extended losses even as the International Energy Agency said oil markets are moving close to balance in the second half of 2016 with stockpiles smaller than it expected. Crude CLU6, -1.12%  was down 1.2% to $48.29 a barrel while Brent LCOQ6, -1.09%  gave up 1.2% at $49.74 a barrel.
Data on the docket: Sales at U.S. retailers rose a solid 0.5% in May after an even larger gain in the prior month, suggesting consumers still feel confident enough in the economy to stick to their usual spending patterns despite a slowdown in hiring.
Early Tuesday, the National Federation of Independent Business said its small-business optimism index rose modestly in May, by two-tenths of a point to 93.8.
The Federal Open Market Committee’s meeting begins Tuesday, but the real update will come Wednesday, when the Fed will release the “dot plot”—which shows where each of the central bank’s 17 governors and regional bank presidents project interest rates. Fed Chairwoman Janet Yellen will hold a news conference 30 minutes after the Fed’s updated economic reports.
Read: Helicopter money champion says Fed will struggle to lift interest rates
Stocks to watch: NXP Semiconductors NV NXPI, -1.16%  shares rose 1.3% premarket after the chip company said late Monday it agreed to sell its “standard products” business to a Chinese consortium for $2.75 billion.
Baidu Inc. BIDU, -0.44% shares fell 5.7% ahead of the bell after cut its quarterly revenue forecast late Monday, citing lower medical advertising as Chinese regulators have been increasing security of that sector.
Alibaba Group Holding Ltd. BABA, -0.62%  shares were up 1.3% premarket after the company’s co-founder, Jack Ma, said a closely watched sales metric may not remain the standard. The e-commerce company is facing a U.S. investigation into the practice.
Revance Therapeutics Inc. RVNC, -0.60%  shares slid 24% in modest volume before the bell after the biotech firm said Monday a late-stage clinical study for its crow’s-feet treatment didn’t reach its main goal.
After the bell, restaurant chain Bob Evans Farms Inc. BOBE, -0.67%  is slated to release fiscal fourth-quarter results.
Other markets: Shares in Asia ADOW, -0.68%  mostly slipped as Brexit worries continued to weigh on markets, with Japan’s Nikkei NIK, -1.00%  losing 1%. The Stoxx Europe 600 SXXP, -1.36%  dropped more than 1%. Gold GCQ6, +0.36%  slipped 0.3%, while the U.S. Dollar Index DXY, +0.31%  moved up 0.5% to 94.790.