Before the Open (Jun 24)

Good morning. Happy Friday. Happy Day-After the Brexit Vote.
The Asian/Pacific markets closed with big, across-the-board losses. Japan fell almost 8%; Australia and South Korea dropped more than 3%; Hong Kong, Singapore, India, New Zealand and Taiwan fell more than 2%. Europe is getting crushed. Greece, Spain and Italy are down more than 10%; France, Germany and Austria are down 7-9%; Belgium, the Netherlands, the Czech Republic, Poland and Portugal are down more than 6%; London, Norway, Turkey and Hungary more than 4%; and Sweden, Denmark and Switzerland more than 3%. Futures here in the States are pointing to a massive gap down open for the cash market (the S&P is down 75).
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The dollar is up 2.44 – a massive move. Oil is down 4%, and copper is also down. Gold is up 5.1%; silver is up 3.6%. Bonds are up big.
Against the odds, Great Britain has voted to leave the EU. Markets around the world are getting crushed. The pound suffered it’s biggest single-day drop in history by falling to mid-1980’s levels. The US dollar has jumped. Gold and silver jumped. Oil tanked. At one point, S&P futures were down so much (5%), it was halted. In total it fell about 120 off its high, and is currently about 90 off its high and 75 below yesterday’s close. To put this in perspective, it fell about 100 during the Flash Crash.
This is possibly the biggest world change since the fall of the USSR.
Great Britain is strong and will be fine on their own in the long run. The bigger fear is others will follow, and the entire EU will unravel.
A big issue was immigration. The open-door policy enabled a lot people to move to the UK – something not embraced by many voters. Ironically Obama was dealt an immigration-related blow yesterday when the Supreme Court blocked his attempt to shield millions of migrants from deportation.
The charts are going to be a mess after today. Personally I’m long gold, silver and a little oil. Based on pre-market prices, I’ll be up pretty big at today’s open.
The UK leaving the EU isn’t a big deal in my eyes – it certainly doesn’t justify the overnight losses in the US. But the uncertainty about others leaving will linger. There will be some buying opportunities at today’s open. There will be some quality stocks on sale. Will last night’s low hold going forward? I don’t know. If we start getting reports France, Italy and others want to leave there could certainly be another stiff leg down.
From a trading standpoint, volatility and movement will be very high going forward. Forget the summer doldrums. Wall St. will not be calm. I’ll comment more in my weekly report. More after the open.
Stock headlines from barchart.com…
Accenture PLC (ACN -0.10%) was downgraded to ‘Neutral’ from ‘Outperform’ at Credit Suisse with a price target of $120.
Danaher (DHR +1.41%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Bernstein.
Albemarle (ALB +1.30%) climbed 1% in after-hours trading after it was announced that it will replace TECO Energy in the S&P 500 after the close of trading on Thursday, June 30.
Darden Restaurants (DRI +1.19%) were upgraded to ‘Buy’ rom ‘Neutral’ at Tigress Financial Partners.
Fortive Corp. ({=FTV-W=}) will replace Columbia Pipeline Group CPGX in the S&P 500 after the close of trading on Friday, July 1.
Inteliquent (IQNT +3.90%) rose nearly 4% in after-hours trading after it was announced that it will replace Emcor in the S&P Smallcap 600.
Sonic (SONC +2.88%) sank 8% in after-hours trading after it reported Q3 system same-store-sales of up +2.0%, weaker than consensus of up +2.4%, and then cut its full-year view for same-store-sales to up 2%-4% from a May 17 projection of up 4%-6%.
Oracle (ORCL +2.05%) was rated a new ‘Outperform’ at Cowen with a 12-month price target of $46.
U.S. bank stocks may be active today after the Fed Stress tests, released after markets closed Thursday, showed that all 33 banks exceed the minimum capital ratios.
Synnex (SNX +1.14%) rallied over 4% in after-hours trading after it reported Q2 adjusted EPS of $1.37, better than consensus of $1.31.
Arista Networks (ANET +3.45%) dropped 4% in after-hours trading on concern its products could be banned from the U.S. because they infringe on patents owned by Cisco, according to a statement on the website of the U.S. International Trade Commission (ITC).
National Storage Affiliates Trust (NSA -0.87%) was rated a new ‘Buy’ at DA Davidson with an 18-month target price of $25.
Emerge Energy Services LP (EMES +2.58%) gained nearly 4% in after-hours trading after it sold a fuel unit to Sunoco for $178.5 million.
Thursday’s Key Earnings
Accenture (NYSE:ACN) unchanged after in-line profits.
BlackBerry (NASDAQ:BBRY) +3.8% topping earnings expectations.
Today’s Economic Calendar
8:30 Durable Goods
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers