>>> What to look at today - 22nd of June 2016

Dow +0.14% S&P +0.27% Nasdaq +0.14% Russell -0.33%
US market ended the Tuesday affair on a flat note as fears regarding a potential Brexit remained in focus. Yellen struck a cautious tone, stating that uncertainties persist in her economic outlook. Specifically, Chair Yellen cited that improvements in the labor market have slowed while global developments need to be monitored. The commentary fell largely in-line with market expectations, mirroring similar remarks from last Wednesday's post-FOMC press conference. commodity-sensitive energy (+1.1%) sector led telecom services (+0.7%), technology (+0.7%), and financials (+0.5%) while materials (-0.3%), health care (-0.3%), and consumer discretionary (-0.2%) ended in the back of the pack. Tech Outperformed with MSFT +2.2%. IBB -1.5%. U.S. Dollar Index (94.12, +0.51) gained 0.5% as the pound, euro, and yen lost ground to the greenback. The sterling lost 0.5% against the buck (1.4617) while the euro declined 0.6% (1.1250) against the dollar. Separately, the dollar gained 0.9% against the safe haven yen (104.86). The uptick in the dollar weighed on commodities as WTI crude finished its pit session lower by 0.3% ($49.77/bbl; -$0.15). Volume were below average at 831m shares. US After Hours : SCTY +23%, TSLA -11% following proposal by TSLA to acquire SCTY. Asia equities are in a holding pattern ahead of Thursday's Brexit vote. Latest poll of certain voters from ORB saw a slight gain in support for Remain - 54% vs 46% for leave (prior 53% for remain, 46% for leave). In China, Moody's warns of rising risks to financial system from banks' investment in loans. S&P chief economist endorses recent PM Abe decision not to raise consumption tax next year; Japan Finance Ministry signals it will not conduct unilateral FX intervention on Friday even if Leave camp in Brexit vote succeeds. GBP/USD was bid about 70pips toward 1.47, USD/JPY came in about 50pips below 104.40.

Nikkei -0.70% Hang Seng +0.40% CSI +0.30% Shanghai +0.27%

Eur$ 1.1257 CNH 6.5960 CNY 6.5879 JPY 104.59 GBP 1.4683 CHF 0.9620 RUB 63.8790

S&P +0.08% EuroStoxx +0.60% Dax +0.58% SMI +0.40%

Macro :
- E&Ps Have Limited Window to Change Their Strategy: Macquarie
- Brevan Howard Co-Founder James Vernon Said to Step Down as COO
- Yellen Offers Subtle Change to Inflation, Job-Market Outlook
- FTSE 100 to Fall 15%, FTSE 250 to Drop 20% in Case of Brexit: SG
- Cameron to Push Migration Reform If U.K. Votes Remain: Telegraph
- French Parliament Report Recommends Sugar-Drink Tax: Parisien

Keep an eye on :
- ADP FP : Paris Airports Seeing Fewer Visitors Because of Strikes: Tribune
- AF FP : Air France Pilot Unions Cancel June 24-27 Strike: AFP
- ALU FP : Alcatel-Lucent Names Olivier Durand as CEO, Replacing Camus
- COLR BB : Colruyt FY EPS, Rev. Narrowly Miss Ests.; Dividend Raised 12%
- DAI GY : Daimler Said to Plan Electric Car Brand: Handelsblatt
- DAI GY : Daimler Will Unveil E-Car With 500km Range Later This Yr: CEO
- DBK GY : Deutsche Bank and Work Council Near Deal on Branch Closures: FAZ
- FGR FP : Bought MDM in Germany (design and construction of noise protection systems, 20m revenues)
- ENEL IM : Enel Won’t Build Big Power Plants as Wind, Solar Get Competitive
- FDFA FP : Gecina Ads New Osra Component to Fonciere de Paris Offer
- ISP IM : Intesa Sanpaolo Sells Its Visa Europe Stake to Visa Inc.
- ITM IM : Italmobiliare to Subscribe HeidelbergCement Reserved Cap Hike
- LHN VX : Lafarge Paid Islamic State in Syria in 2013-2014, Le Monde Says
- MC FP : Qatar Fund Said to Ready Purchase of France’s Balmain: Rtrs
- MRL SM : Merlin Signs Integration With Metrovacesa to Create Rental Group
- NHH SM : NH Hotel CEO Gonzalez Not Re-Elected, Resigns From Board
- GLE FP : GIC Said in Talks to Sell $563m Paris Offices to SocGen
- SYNN VX : ChemChina Takeover of Syngenta Is ‘Concerning’: Senator Grassley
- TEF SM : Telefonica Said to Be Talking With Banks on Potential O2 IPO: FT
- TIT IM : Here’s How Oi’s $14 Billion Default Swaps Settlement Plays Out
- TNTE NA : FedEx to Report Express, TNT Results Separately in Fiscal 2017
- UBSG VX : UBS Warns of Thin FX Liquidity, Wider Spreads on Referendum Day
- DG FP : Vinci Names Executive Vice Presidents to Expand Outside Europe
- VOW3 GY : Volkswagen Says Brand Chief Diess Probed by Prosecutors
- VOW3 GY : VW Supervisory Board Members Split on Clearing Management: FAZ

>>> Europe : Brokers Upgrades & Downgrades - 22nd of June 2016

>>> Up
*GRAINGER RAISED TO OVERWEIGHT AT JPMORGAN
*GRAND CITY PROPERTIES RAISED TO OVERWEIGHT AT JPMORGAN
*IMPERIAL HOLDINGS RAISED TO HOLD VS SELL AT RENAISSANCE CAPITAL
*JULIUS BAER RAISED TO BUY VS NEUTRAL AT CITI
*SCHINDLER RAISED TO SECTOR PERFORM AT RBC CAPITAL
*U AND I GROUP PLC RAISED TO OVERWEIGHT AT JPMORGAN

>>> Down
*ASSOCIATED BRITISH FOODS CUT TO EQUAL-WEIGHT AT MORGAN STANLEY
*BIG YELLOW GROUP CUT TO UNDERWEIGHT AT JPMORGAN
*INTERCONTINENTAL HOTELS CUT TO NEUTRAL VS BUY AT GOLDMAN
*PROSIEBENSAT.1 MEDIA SE CUT TO UNDERWEIGHT AT JPMORGAN
*SOLARCITY CUT TO HOLD VS BUY AT STIFEL
*SYNTHOMER CUT TO SELL VS NEUTRAL AT UBS
*TESLA MOTORS CUT TO MARKET PERFORM AT OPPENHEIMER

>>> PT Change


>>> Initiation
*CENTAMIN RATED NEW HOLD AT JEFFERIES
*DIXONS CARPHONE RATED NEW BUY AT HSBC, PT 460P
*PADDY POWER BETFAIR REINSTATED NEUTRAL AT GOLDMAN; PT 10,200P
*SIF HOLDING RATED NEW BUY AT HSBC

>>> Call
>> Stock
*INGENICO ADDED TO CONVICTION BUY LIST AT GOLDMAN

(CS) Global Equity Strat. Brexit scenario: what would happen next?

We discuss the potential impact on markets and growth following a hypothetical vote tomorrow for Britain to leave the EU. Into a full Brexit scenario, our FTSE 100 year-end target would fall to 6,200 from 6,600. We would also take our S&P 500 year-end target to 2,000 from 2,150, and our Euro Stoxx 50 target to 2,950 from 3,350. We would move UW of peripheral Europe. Based on correlations with gilt yields, sterling and PMIs, the worst performing sectors into a Brexit would likely be financials, real estate and transport. The best performing sectors would likely be pharma, consumer staples and energy

--> Into a full Brexit scenario, our FTSE 100 year-end target would fall to 6,200 from 6,600; the FTSE currently looks c.10% cheap on our model – recall c.70% of FTSE earnings come from outside the UK. We would also take our S&P 500 year-end target to 2,000 from 2,150, and our Euro Stoxx 50 target to 2,950 from 3,350. We estimate the Euro Stoxx needs to fall by 5-10% relative to the US to hit the same crisis P/E as we saw in the Greek crisis and, so far, only 35% of post-2014 inflows have reversed. In this scenario, we would move underweight of peripheral Europe, where the key drivers have been spreads and the euro.

>>> Asian Update

Asian Mid-session Market Update: Japan Fin Min signals caution ahead of Brexit vote; North Korea testing short-range missiles

***Economic Data***
- (AU) AUSTRALIA MAY SKILLED VACANCIES M/M: 1.0% V 0.8% PRIOR
- (AU) AUSTRALIA MAY WESTPAC LEADING INDEX M/M: 0.2% V 0.1% PRIOR; 16-month high
- (NZ) NEW ZEALAND MAY RETAIL CREDIT CARD SPENDING M/M: 0.0% V 2.4% PRIOR; Y/Y: 5.9% V 9.1% PRIOR
- (NZ) New Zealand May Net Migration: 5.5K v 5.5K prior; YTD 68.4K, record high
- (TW) Taiwan May Unemployment rate Y/Y: 4.0% v 4.0%e

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -0.7%, S&P/ASX +0.3%, Kospi +0.5%, Shanghai Composite +0.5%, Hang Seng +0.4%, Sep S&P500 +0.1% at 2,082

***Commodities/Fixed Income***
- Aug gold -0.1% at $1,271/oz, Aug crude oil +0.5% at $50.12/brl, Jul copper -0.4% at $2.12/lb
- (US) Weekly API Oil Inventories: Crude: -5.2M v +1.2M prior; largest draw since Jan 5th
- GLD: SPDR Gold Trust ETF daily holdings rise 3.5 tonnes to 912.3 tonnes; highest since Oct 2013
- SLV: iShares Silver Trust ETF daily holdings fall to 10,359 tonnes from 10,403 tonnes prior; lowest since Apr 3rd
- (CN) China MoF sells 3-year bonds at 2.558%
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.5935 V 6.5656 PRIOR
- (CN) PBOC to inject CNY150B in 7-day reverse repos
- (JP) BOJ offers to buy ¥350B in 1-3yr JGBs, ¥440B in 3-5yr JGBs, ¥450B in 5-10yr JGBs, and ¥100B in floating-rate JGBs
- (AU) Australia MoF (AOFM) sells A$900M in 4.25% 2026 bonds; avg yield 2.205% v 2.414% May 3rd; bid-to-cover 2.47x v 2.89x May 3rd

***Market Focal Points/FX***
- Asia equities are in a holding pattern ahead of Thursday's Brexit vote. Latest poll of certain voters from ORB saw a slight gain in support for Remain - 54% vs 46% for leave (prior 53% for remain, 46% for leave).

- China Premier Li echoed PBoC remarks overnight, pledging to continue prudent monetary and proactive fiscal policies, aiming to maintain reasonable growth in aggregate credit. Also in China, Moody's warns of rising risks to financial system from banks' investment in loans.

- S&P chief economist endorses recent PM Abe decision not to raise consumption tax next year; Japan Finance Ministry signals it will not conduct unilateral FX intervention on Friday even if Leave camp in Brexit vote succeeds.

- North Korea fired two short-range missile - first believed to have failed but the 2nd travelled about 400km; Japan plans to protest the launch. Bank of Korea Gov Lee cautioned that uncertainties in Korean economy - risks associated with Fed hikes and rising domestic household debt - are rising.

- In FX majors, GBP/USD was bid about 70pips toward 1.47, USD/JPY came in about 50pips below 104.40, AUD/USD ranging in 0.7440-70, NZD/USD advancing 25pips above 0.7140. PBoC Yuan fix was the weakest since Apr 15th.

***Equities***
US equities / ADRs:
- SCTY: Tesla offers to acquire SolarCity in all stock proposal with exchange ratio of 0.122-0.131 shares/shr (valued at $26.50-28.50/shr or $2.5-3.0B) - Tesla blog; +14.7% afterhours; TSLA -12.2%
- CHDN to enter S&P midcap 400 index; +4.7% afterhours
- LZB: Reports Q4 $0.45* v $0.48e, R$417M v $416Me; +3.2% afterhours
- KBH: Reports Q2 $0.17 v $0.16e, R$811M v $753Me; +1.7% afterhours
- FDX: Reports Q4 $3.30 v $3.26e, R$13.0B v $12.8Be; -1.2% afterhours
- HPQ: To make one time investment to reduce supply inventory over two quarters - printing update call; -2.9% afterhours
- QEP: Acquires additional oil properties in core of Permian Basin for $600M from several sellers; -3.5% afterhours
- ADBE: Reports Q2 $0.71 v $0.68e, R$1.40B v $1.40Be; Guides Q3 $0.69-0.75 v $0.71e, R$1.42-1.47B v 1.46Be; -4.8% afterhours

Notable movers by sector:
- Consumer discretionary: Li Ning Co 2331.HK +5.6% (Outperform at Credit Suisse)
- Financials: WesFarmers WES.AU -0.6% (impairment charge)
- Industrials: Mitsubishi Motors 7211.JP +2.1% (initial FY guidance); Suzuki Motor Corp 7269.JP +3.5% (Goldman raises to buy)
- Technology: Tencent 700.HK +2.1% (to buy Supercell)
- Materials: Saracen Mineral SAR.AU -7.9%; Regis Resources RRL.AU -4.8%; Evolution Mining EVN.AU -4.6% (gold price falls)
- Energy: Tokyo Gas 9531.JP -6.6% (acquisition)
- Telecom: P: Softbank Corp 9984.JP +3.0% (to sell Supercell stake; President to step down)

WSJ : Tesla Offers to Acquire SolarCity

Tesla Offers to Acquire SolarCity

Elon Musk proposed combining the electric-car and solar-energy companies that he backs, the latest in a series of financial shuffles among disparate firms of his empire.

Tesla Motors Inc., Mr. Musk’s Palo Alto, Calif., electric-car company, on Tuesday offered to acquire SolarCity Corp. in an all-stock deal valuing it at up to $2.8 billion. Mr. Musk is the chairman and largest shareholder of both companies.

Tesla shares tumbled 12% in after-hours trading following Mr. Musk’s announcement, while SolarCity shares surged 15%.

Tesla, in a letter to SolarCity Chief Executive Lyndon Rive —also Mr. Musk’s cousin—said its offer represented a value of between $26.50 and $28.50 a share, or a premium of roughly 21% to 30% over SolarCity’s Tuesday closing price of $21.19. The mothers of Messrs. Musk and Rive are twin sisters.

“This is something that we have been thinking about and debated for many years,” Mr. Musk said in a call with reporters Tuesday. “But the timing seemed to be right now” because Tesla is ramping up production of batteries used in conjunction with solar panels, SolarCity’s main business, he said. Mr. Rive on the same call said he was “very excited” about the potential deal, which still requires approval from shareholders.

Mr. Musk, who has borrowed money and shuffled funds among his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and will do so for any vote on the SolarCity board as well, the offer letter said. Antonio Gracias, a director on the boards of both companies, also recused himself, the letter said.

Tesla said the deal is subject to approval of “a majority of disinterested stockholders” of both companies.

“You should know that the board and the shareholders will be considering this, and so while I am personally excited, I will be recusing myself from the decision-making process,” Mr. Rive said in a letter to employees. “Ultimately, the shareholders will decide.”

The acquisition aims to create a company employing nearly 30,000 people with all products renamed “Tesla” that will package electric cars, batteries and solar panels for customers, Mr. Musk said.

But it would also add to the growing complexity and vertical integration of Tesla and add an unprofitable operation to its already-strained finances. Tesla, in a huge growth effort that includes building a $5 billion battery factory in Nevada, isn’t expected to be profitable until 2020 at the earliest and recently launched a share sale to raise $1.7 billion for capital expenses.

Tesla, with a market capitalization of $32.7 billion is a much larger company than SolarCity, whose market value is $2.1 billion.

The proposal is also likely to draw further scrutiny of Mr. Musk’s dealings with multiple companies he owns and helms, and their financial viability. In addition to Tesla and SolarCity, Mr. Musk is the largest shareholder and chief executive of rocket maker Space Exploration Technologies Inc.

SpaceX in 2014 was the largest buyer of $214 million in bonds SolarCity offered.

Mr. Musk has purchased shares of both Tesla and SolarCity when they have needed capital, and secured $475 million in personal credit lines with his own shares in the companies. Mr. Musk has disclosed the risks of margin calls related to the loans that can risk destabilizing the companies’ stocks.

While Mr. Musk has called questions about the financial maneuvering “valid,” he has defended the transactions with a philosophy that he has a moral obligation to put his own money at risk alongside those of other investors backing his companies.

“I don’t think this creates additional financial risk for Tesla,” Mr. Musk said on Tuesday of the proposed SolarCity takeover. “It only amplifies the possibilities for both companies.”

Still, Tesla has burned billions of dollars in cash building expensive electric vehicles with ambitious production goals.

Tesla aims to start selling a more modestly priced Model 3 car starting at around $35,000 in the second half of next year, for which it has received nearly 400,000 reservations. “This does not impact Model 3 in any way, shape or form,” Mr. Musk said of the proposed SolarCity takeover.

Mr. Musk has attracted a cultlike following, making bold predictions that include an eventual trip to Mars. Tesla’s stock price has surged more than 500% since 2013, helping it achieve a market value of more than $30 billion, more than two thirds the current value of General Motors Co. On Sunday, he declared that Tesla’s Model S car “floats well enough to turn into a boat” while emphasizing he wasn’t recommending motorists attempt such a feat.

But Tesla’s surging stock hasn’t yet translated to profits, and investors have closely watched the company for signs of dangerous cash burns.

Tesla’s proposed takeover comes amid significant struggles for SolarCity, which has suffered stock-price declines exceeding 60% over the past 12 months and lost $283 million during the first three months of this year.

The San Mateo, Calif., company installs solar panels at residences across the U.S. The company stumbled as costs rose and it cut an important growth target by half, a move SolarCity attributed to a desire to focus on profitability.

Mr. Musk said the proposed takeover wasn’t motivated by SolarCity’s declining stock price.

SolarCity’s business model is built on leasing rooftop panels to homeowners for as long as 20 years, but owning home solar arrays can bring greater savings so many consumers are opting to buy.

SolarCity’s competition has intensified over the past year as more upstart firms began offering homeowners low-cost loans to kit out their roofs.

More broadly, the home solar industry is facing stiff headwinds across several states as electric utilities push back against policies that have made it economic for homeowners to generate their own rooftop solar power and sell excess electricity they didn’t use to the power grid.

Nevada, Hawaii and other states traditionally friendly to renewable energy efforts have dialed back their solar-power incentives payments, which are the backbone of home solar firms’ balance sheets.

Several states have significantly lowered the amount of money they are willing to pay homeowners with solar panels for their excess electricity; many more states are weighing changes to those so-called net metering programs.

>>> US After Hours Summary: SCTY +23%, TSLA -11% following proposal by

After Hours Summary: SCTY +23%, TSLA -11% following proposal by TSLA to acquire SCTY

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: KBH +3.2%

Companies trading higher in after hours in reaction to news: SCTY +23.2% (Tesla (TSLA) makes offer to acquire SolarCity in exchange for Tesla common shares (proposal represents a value of $26.50 to $28.50 per share), PWE +4.2% (announces Competition Act Clearance to complete sale of Saskatchewan assets; expects to be fully in compliance with all of financial covenants at the end of Q2 and the remainder of 2016)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: ADBE -4.1%, HPQ -3.8%

Companies trading lower in after hours in reaction to news: TSLA -11.2% (On SolarCity (SCTY) proposal), UAM -4.2% (to offer up to $100 mln principal amount of Convertible Senior Notes due 2021 through a private offering), QEP -3.2% (commences 20 mln common share public offering), COT -3.1% (prices public common share offering on a bought deal basis)

>>> Delivery.com receiving investor approaches; watchful of buys in new vertical

Delivery.com receiving investor approaches; watchful of buys in new verticals – CEO
Delivery.com, an online food, beverage, grocery and laundry delivery company, is regularly approached by interested investors, but is not entertaining fresh capital for the time being, said CEO Jed Kleckner.

The New York City-based company, backed by the venture capital arm of financial services firm Cantor Fitzgerald, has 2m registered users. Financial discipline has been the cornerstone of Delivery.com’s to-date growth strategy, Kleckner said. The company has received several capital different offers recently, but is hesitant to “over finance” itself, he said.

Kleckner declined to provide specific financial results, but said the company's laundry and liquor categories are experiencing "triple-digit" and "outsized growth versus the market."

New partnerships in the quarters ahead -- such as those the company has already agreed to with Uber and Yelp (NYSE:YELP) -- will be a focus for Delivery.com as it pushes towards profitability. The company's "marketplace" consists of more than 12,000 local service providers.

Many platforms have bought their way into growth by offering freebies and so forth, which Kleckner said he sees as unsustainable. Although he wants to trial other verticals and enter markets beyond the US, Kleckner said that these are desires rather than needs.

So far, Delivery.com made three acquisitions: the first, in 2009, of New York City-based Eats Media; the second in 2013 of New York City-based Brinkmat, an e-commerce platform for laundry and dry-cleaning scheduling and ordering; and the latest in April 2016 of Austin, Texas-based BrewDrop, an online liquor, wine, and beer store. The latter two were “transformative” to the business, while the first was more of a “talent acquisition,” Kleckner explained.

Although remaining watchful for opportunities to enter new verticals in delivery, such as pharmacy, Kleckner said he is not actively pursuing any specific targets at this time.

An influx of new web-based delivery platforms in different niches in recent years means that Delivery.com should be able to avail of good value on future buys, avoiding paying ”exorbitant sums,” Kleckner observed, with questions of company culture and governance to the front of his mind. Smaller sector players seeking to be acquired approach the company frequently, he said.

Food delivery is the company’s anchor, Kleckner said, explaining that it has begun exploring ways of teaming food with other products on the platform, specifically wine, and packaging them for customers.

Kleckner pointed to Amazon.com (NASDAQ:AMZN) as an example of a business that has successfully introduced new categories to its customers. Delivery.com allows customers to “cross-collateralize” points within its loyalty system.

Two areas identified potential for growth – alcohol and pharmacy – will be slow because of variance in regulatory regimes state-to-state, according to Kleckner.

Delivery.com has between 75 and 80 employees.

NY POst : Cops shut down Lincoln Tunnel lane for ‘King of Diamonds’

An Israeli billionaire known as the “King of Diamonds” is the bigwig businessman who got a police escort through the Lincoln Tunnel in a lane that was closed to other drivers, The Post has learned.

Lev Leviev, who is also chairman of the international real estate firm Africa Israel, is the unidentified US visitor who received the extraordinary favor that’s part of the feds’ case against two high-ranking cops, sources said Tuesday.

Details of the incident came from a cooperating witness who’s been identified by sources as Jona Rechnitz, a real estate developer who once worked for Africa Israel.

Rechnitz told the feds that the escort was arranged by his pal Jeremy Reichberg, “using his connections in local law enforcement agencies,” court papers say.

Rechnitz told the feds that the escort was arranged by his pal Jeremy Reichberg, “using his connections in local law enforcement agencies,” court papers say.

The complaint doesn’t say when the lane closure occurred.

Law enforcement sources said Reichberg’s request did not go through official channels and there was no documentation about the incident.

Reichberg was arrested Monday along with NYPD Deputy Chief Michael Harrington and Deputy Inspector James Grant. Another cop, Sgt. David Villaneuva, was busted separately, and the feds also revealed that a fourth cop — Officer Richard Ochetal — had secretly pleaded guilty and was cooperating with authorities.

The 59-year-old Leviev is a renowned investor in precious stones whose direct competitor is international diamond powerbroker The De Beers Group.

Born in Uzbekistan to a prominent Jewish family, Leviev moved to Israel when he was 15 and got his start as an apprentice at a diamond polishing business.

After a stint in the Israeli military, Leviev opened his first diamond company and soon expanded his business to the former Soviet Union and Europe.

He currently owns several diamond mines in Africa and Russia and operates pricey jewelry boutiques in New York, London, Dubai and Singapore.

A lawyer for one of Leviev’s daughters denied that Leviev had received the police escort.

“Lev does not know Jeremy Reichberg,” lawyer Charles Michael said.

>>> US Close Dow +0.14% S&P +0.27% Nasdaq +0.14% Russell -0.33%

Closing Market Summary: Stocks Tick Higher with Brexit and Yellen in Focus

The stock market ended the Tuesday affair on a flat note as fears regarding a potential Brexit remained in focus. Additional factors contributing towards today's trade included strengthening in the dollar, weakening in oil prices, largely in-line commentary from Fed Chair Janet Yellen, and sector leadership from heavily-weighted technology (+0.7%) and financials (+0.5%). The S&P 500 (+0.3%) ended its day ahead of the Dow Jones Industrial Average (+0.1%) and the Nasdaq Composite (+0.1%).

Equity indices opened on a higher note as investors weighed developments in the latest round of Brexit polling. European indices extended their recent winning streak as an ORB poll for the Telegraph showed that the "Remain" camp maintains a lead over the "Leave" faction. However, a Survation poll showed that the referendum remains highly contested with both camps polling within one percentage point of one another.

The benchmark index slipped from its opening high as investors weighed testimony from Fed Chair Janet Yellen. The central bank head struck a cautious tone, stating that uncertainties persist in her economic outlook. Specifically, Chair Yellen cited that improvements in the labor market have slowed while global developments need to be monitored. The commentary fell largely in-line with market expectations, mirroring similar remarks from last Wednesday's post-FOMC press conference.

The S&P 500 carved out a session high in the final ninety minutes of trade, but failed to clear technical resistance at the 2093 price level. As a result, the benchmark index ended its day off its best level as six sectors finished in the green. The commodity-sensitive energy (+1.1%) sector led telecom services (+0.7%), technology (+0.7%), and financials (+0.5%) while materials (-0.3%), health care (-0.3%), and consumer discretionary (-0.2%) ended in the back of the pack.

The heavily-weighted technology sector (+0.7%) demonstrated relative strength as Dow component Microsoft (MSFT 21.19, +1.12) outperformed. The name jumped 2.2% and finished at the top of the price-weighted index. Elsewhere, Western Digital (WDC 48.87, +1.26) gained 2.7% after announcing that it would collaborate with Hewlett Packard Enterprise (HPE 19.76, +0.38) and VMware (VMW 60.98, +0.21) on the production of rack servers. The PHLX Semiconductor Index (+0.3%) finished behind the broader sector while component Micron (MU 12.75, +0.42) outperformed.

In the financial sector (+0.5%), rate-sensitive real estate investment trusts outperformed as American Tower (AMT 109.44, +2.02) gained 1.9%. Elsewhere, Berkshire Hathaway (BRK.B 143.53, +1.86) advanced 1.3% while Wells Fargo (WFC 47.23, +0.30) and JPMorgan Chase (JPM 62.95, +0.58) led money center bank names.

Biotechnology underperformed in the health care space (-0.3%), evidenced by the 1.5% decline in the iShares Nasdaq Biotechnology ETF (IBB 254.79, -3.74). In the sub-group, Vertex Pharmaceuticals (VRTX 85.27, -1.45) and Celgene (CELG 96.86, -2.43) fell 1.7% and 2.5%, respectively.

The U.S. Dollar Index (94.12, +0.51) gained 0.5% as the pound, euro, and yen lost ground to the greenback. The sterling lost 0.5% against the buck (1.4617) while the euro declined 0.6% (1.1250) against the dollar. Separately, the dollar gained 0.9% against the safe haven yen (104.86). The uptick in the dollar weighed on commodities as WTI crude finished its pit session lower by 0.3% ($49.77/bbl; -$0.15).

The Treasury complex settled lower as the yield on the 10-yr note rose one basis point to 1.70%.

Today's volume was below the recent average as fewer than 831 million shares changed hands on the NYSE floor.

There was no economic data of note released today.

Tomorrow's data will include the weekly MBA Mortgage Index and the FHFA Housing Price Index, which will be released at 7:00 ET and 10:00 ET, respectively. Finally, Existing Home Sales for May (consensus 5.50 million) will cross the wires at 10:00 ET.

  • Nasdaq Composite -3.3% YTD 
  • Russell 2000 +1.6% YTD
  • S&P 500 +2.2% YTD
  • Dow Jones +2.3% YTD