The fallout from the historic vote for the United Kingdom to exit the European Union will likely carry over into a new week in the trading days ahead.
The pro-'Brexit' vote, which favored the U.K. leaving the 28-member bloc after a more than 40-year relationship, has brought turmoil to global markets, U.S. equities, crude prices and currency exchange in equal measure. On Friday the S&P 500 declined by 3.6%, the Dow Jones Industrial Average lost 3.4% and the Nasdaq Composite Index dropped by 4.1%.
"This is going to take a while to unwind. It will not occur overnight," said Tom Siomades, head of Hartford Funds' Investment Consulting Group. "I see this as a Black Monday-type scenario where markets will be down sharply over the next few days; however, the fundamentals have not changed, and markets will recover."
The controversial outcome of the referendum will likely influence monetary policy over on this side of the pond, predicts Siomades. The Federal Reserve could have trouble justifying a rate hike this year between current trouble in Europe and a highly-contentious U.S. election in the back-half of the year.
A speech from Fed Chair Janet Yellen mid-week will attract scrutiny with investors eager for her insight on how the 'Brexit' could impact the U.S. economy and monetary policy. Yellen will speak on a panel on Wednesday with Bank of England Governor Mark Carney, European Central Bank President Mario Draghi, and Brazil Central Bank Governor Alexandre Tombini at an ECB central banking conference in Portugal.
Separately, St. Louis Fed President James Bullard will address the Society of Business Economists in London on Thursday, and Cleveland Fed President Loretta Mester speech will discuss the economic outlook at another London event on Friday.
The third and final reading on first-quarter gross domestic product will be released on Tuesday morning. The U.S. economy suffered economic slowdown at the beginning of the year as cautious consumers opted to save rather than spend, a strong U.S. dollar and weaker overseas demand hampered U.S. manufacturing, and energy prices continued to weigh on the sector.
The manufacturing sector will be in the spotlight with international trade in goods data for May out on Monday, while the ISM Manufacturing Index for June will be released on Friday. Construction spending for May is scheduled for Friday.
April's S&P Case-Shiller home price index, which tracks homes prices across twenty major U.S. cities, is set for release on Tuesday. The pending home sales index for May, which looks at contracts signed where the deal has not yet closed, is out on Wednesday.
Consumer confidence for June will be released on Tuesday, personal income and spending for May on Wednesday, and June motor vehicle sales from the top automakers including Ford (F) and General Motors (GM) on Friday.
A few first-quarter earnings reports are peppered throughout the week. Carnival (CCL) , IHS (IHS) , and Nike (NKE) are scheduled for Tuesday; General Mills (GIS) , Pier 1 Imports (PIR) , Acuity Brands (AYI) , and Monsanto (MON) on Wednesday; and ConAgra Foods (CAG) , Constellation Brands (STZ) , McCormick (MKC) , and Micron Technology (MU) on Thursday.