Tech Deals Could Cushion Downside Prompted By Brexit, Rate Fears

(RTTNews) - The major U.S. index futures are pointing to a lower opening on Monday, with futures trimming some of the early losses following the announcement of some deals in the tech space and the rebound by commodities. Commodities are all on the way higher, although crude oil is under pressure. The dollar is mixed against its major counterparts. Although the declines in the past two sessions and the deal news could prove market positive, risks remain in the form of a potential Brexit and the monetary policy decisions of the week. European stocks are overwhelmed by fears of Brexit and are reacting with a notable move to the downside. U.S. stocks finished the week ended June 10th mostly lower, as oil prices and rate hike expectations were the dominant themes in the markets. Last Monday, the major averages advanced solidly, helped by Fed Chair Janet Yellen's dovish comments following the release of a dismal jobs report in the previous week. With the markets contending with profit taking pressure, the major averages ended mixed on Tuesday despite higher oil prices offering support. Higher oil prices catalyzed an upward move by the markets on Wednesday. Risk aversion amid fears of a potential June rate hike kept sentiment subdued on Thursday, resulting in a modestly lower close. Oil and rate fears worked in unison on Friday, sending stocks notably lower for the session. For the week, the Dow Industrials added 58.28 points or 0.33 percent before ending at 17,865. The Dow did go above the psychological barrier of 18,000 on Wednesday. However, the S&P 500 Index ended down 3.06 points or 0.15 percent at 2,096, off a nearly one-year high hit on Wednesday. The Nasdaq Composite lost 47.97 points or 0.97 percent before settling at 4,895.

Among the sectors, the NYSE Arca Biotechnology Index and the NYSE Arca Broker/Dealer Index lost over 3.5 percent each. Additionally, the KBW Bank Index slid 2.25 percent. On the other hand, the Philadelphia Oil Service Index rallied 6.13 percent. The NYSE Airline Index and the NYSE Arca Gold Bugs Index gained 3.13 percent and 1.90 percent, respectively. Currency, Commodity Markets Crude oil futures are slipping $0.64 to $48.43 a barrel after rising $0.45 or 0.93 percent to $49.07 a barrel in the week ended June 10th. Last week, oil rose to a nearly 1-year high above the $51-a-barrel mark amid worries of production cuts. However, profit taking and the dollar's strength weighed on the commodity, resulting in the trimming of some of the gains. Gold futures, which rallied $33 or 2.66 percent to $1,275.90 an ounce in the previous week, are climbing $13.40 to $1,289.30 an ounce. The precious metal sparkled last week as its safe haven appeal amid market turbulence offered support, helping it record a weekly gain for the second straight week. Among currencies, the dollar finished the week ended June 10th firmer against the yen and the euro. Against the yen, the buck rose 0.41 percent over the week before ending at 106.97 yen and it gained 1.02 percent against the euro to $1.1251. The U.S. dollar is currently trading at 106.02 yen and is valued at $1.1257 versus the euro. Asia The major Asian markets retreated, with the Japanese, Chinese and Hong Kong markets plunging sharply. Multiple factors, including Fed rate hike worries and the Brexit threat weighing heavily on the markets. The Australian market was closed for a public holiday. The Japanese market tumbled as the yen firmed up towards the lower 106-yen level against the dollar. The Nikkei 225 Index opened lower and fell steadily until early afternoon trading. The index moved roughly sideways thereafter before ending down 582.18 points or 3.51 percent at 16,019. All but one of the index components declined in the session. Sumco, Mitsui Chemicals, Inpex, Nippon Soda, Nippon Sheet Glass, Kobe Steel, Furukawa, Minebea, Mitsumi Electric, Pioneer, Hino Motors, Mazda Motors and Sony Financial were among the worst performers of the session. Hong Kong's Hang Seng Index closed 529.65 points or 2.52 percent lower at a 2-week low of 20,513, and China's Shanghai Composite plunged 94.09 points or 3.21 percent, ending at 2,833. On the economic front, the National Bureau of Statistics of China released a trio of reports showing a softening of growth. Retail sales growth slowed to 10 percent from 10.1 percent in the previous month, while economists expected the rate to match with April's. Fixed asset investment rose 9.6 percent for the 5-month period, shy of the 10.5 percent growth expected by economists. Meanwhile, industrial output rose 6 percent year-over-year in May, in line with expectations and the same rate of growth as in April. The Chinese Commerce Ministry also reported that foreign direct investment in China fell 1 percent year-over-year in May. Sentiment among large manufacturers in Japan worsened in the three months ended June, while the future situation is expected to improve, the quarterly survey by the Ministry of Finance and the Cabinet office showed. The Business Survey Index dropped to -11.1 in the three-month period to June from -7.9 in the previous three months. Europe European stocks opened lower, with the German and French market trading notably lower, while the U.K. market is experiencing a moderate loss. A bevy of central bank decisions due for the week could keep the traders nervous. The region faces another major risk in the form of the Brexit, with the referendum to decide on the fate of Britain with respect to its position in the European Union scheduled for June 23rd. In major corporate news, G4S stock took a beating after it was revealed that Omar Mateen, the gunman behind the Orlando mass shooting, had been employed by G4S since September 10th, 2007. U.S. Economic Reports Activity on the economic front picks up in the unfolding week, with the 2-day FOMC meeting unquestionably the most closely watched event of the week. A June rate hike is not off the table and the fact could accord more importance to the FOMC policy statement, the Fed Chair's press conference and the FOMC forecasts. Traders may also focus on the Commerce Department's retail sales data for May, the results of separate manufacturing surveys for June by the New York Federal Reserve and the Philadelphia Federal Reserve, the Federal Reserve's industrial production report for May, the weekly jobless claims report, the National Association of Home Builders' housing market index for June, the Labor Department's consumer price index for May and the Commerce Department's housing starts report for May. The Commerce Department's business inventories report for April, the Labor Department's import and export prices and producer price inflation reports, both for May, and announcements concerning next week's Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week. Stocks in Focus

Microsoft (MSFT) agreed to buy LinkedIn (LNKD) for $196 per share in cash or $26.2 billion, inclusive of LinkedIn's net cash. The deal is expected to close this calendar year. Symantec (SYMC) announced a deal to buy privately held Blue Coat for $4.65 billion in cash. The deal is expected to close in the third quarter of 2016. Blue Coat's CEO Greg Clark is to be appointed as the CEO of Symantec after the closure of the deal. The company also said it expects its 2018 non-GAAP earnings of $1.70-$1.80 per share, including $150 million in run-rate cost synergies plus $400 million in previously announced net cost savings. Dr. Reddy's (RDY) announced an agreement with Teva (TEVA) and an affiliate of Allergan (AGN) to buy a portfolio of eight ANDAs in the U.S. for $350 million in cash at closing. The portfolio pertains to products divested by Teva as a pre-condition to the closing of its acquisition of Allergan's generic business.