Stock Futures Slip in Return From Long Weekend on Brexit Focus
Stock futures slipped Tuesday in their return from the long Independence Day weekend as focus returned to the thorny issue of the Brexit.
S&P 500 futures were down 0.67%, Dow Jones Industrial Average futures fell 0.59%, and Nasdaq futures declined 0.65%.
Stocks had rallied in the previous week, wiping out much of the Brexit selloff, thanks to a spike in speculation that the turmoil in Europe will delay a rate hike in the U.S. and increase the chances of monetary stimulus from global central banks. The protracted time for an exit from the EU -- likely at least two years -- also gave investors a reason to buy back in the near term.
The Bank of England said Tuesday it would reduce the amount of capital banks need to hold to free up more money for lending to businesses and households following the aftermath of Great Britain's vote to leave the European Union. Bank of England Gov. Mark Carney said that the central bank has the scope to deal with Article 50, which will kick off Britain's exit, when it is invoked.
"The Bank of England is making strenuous efforts to reassure the markets that it can provide ample liquidity and relax monetary policy to counter some of the effects of the Brexit uncertainty shock on the economy," Societe Generale analysts wrote in a note.
Crude oil was in retreat after closing last week with a five-day gain of 2.8%. The commodity ended the second quarter on Thursday with gains of 26%, its best quarterly performance since 2009, thanks to disruptions to global oil production, particularly in Canada, Nigeria and Venezuela.
West Texas Intermediate crude oil was down 3.1% to $47.46 a barrel on Tuesday morning.
Tesla (TSLA) - Get Report fell nearly 4% in premarket trading after releasing a second-quarter sales update that fell well short of company estimates. The electric car company said it produced 18,345 vehicles in the second quarter of 2016, a 20% increase from the previous quarter. However, a late-quarter production increase meant deliveries reached only 14,370 vehicles, below an expected 17,000.
Netflix (NFLX) - Get Report was downgraded to hold from buy at Needham. The firm said exposure to Europe should accelerate subscriber churn or slow subscriber growth.
Nordstrom (JWN) - Get Report was upgraded to hold from sell at Miller Tabak. Analysts said the move was a valuation call based on a $39.50 price target.
Walt Disney's (DIS) - Get ReportFinding Dory topped the weekend box office for the third week in a row, generating an estimated $50.2 million in North American ticket sales over the four-day holiday weekend. The animated sequel has taken in $538.3 million globally during its three-week run. Warner Bros.' The Legend of Tarzan pulled in $38.1 million domestically in its weekend debut, a disappointing haul and just a fraction of its $180 million production cost.