“U.S. stocks fell Friday, giving back all the gains scored in the previous session’s rebound, as worries about next week’s ‘Brexit’ and lingering concerns about the Federal Reserve’s reluctance to raise interest rates weighed on shares,” Joseph Adinolfi and Sara Sjolin report for MarketWatch. “‘Today is all about not wanting to go home long,’ said Mike Antonelli, equity sales trader at R.W. Baird & Co.”
“The Dow Jones Industrial Average slipped 111 points, or 0.6%, to 17,623, with Merck & Co. Inc. and Apple Inc. emerging as the biggest decliners,” Adinolfi and Sjolin report. “The blue-chip index is on track for a 1.3% weekly fall. The S&P 500 fell 13 points, or 0.7%, to 2,064, leaving it set for a 1.4% weekly decline. The Nasdaq Composite dropped 50.39 points, or 1%, to 4,794, headed for a 1.9% weekly decline.”
“A long-anticipated referendum on the U.K.’s membership in the European Union is set for June 23. Polls released in recent weeks showed gathering support for the ‘leave’ vote—an outcome that many economists say would spark widespread turmoil in global markets and possibly sink the U.K. into a recession… In light of the tragedy in Britain, the International Monetary Fund delayed the publication of its economic report on the U.K. by 24 hours to 7 p.m. Eastern Time on Friday,” Adinolfi and Sjolin report. “‘It’s the weekend ahead of the Brexit vote and that seems to be the primary driver of price action. The Fed is now in the past but it did drop a nervous tone on the market. We’re still digesting that,’ Antonelli said.”
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MacDailyNews Take: Quadruple Witching is today. “Individual stock futures, individual stock options, index futures, and index options all expire together,” Martin Tillier explains vis Nasdaq.com.
“The result of that, though, is often not as big as many people imagine,” Tillier writes. “It nearly always causes a large spike in volume as people adjust positions from those contracts, but does not necessarily produce much actual movement. Remember that there must, by definition, be an equal number of buyers and sellers of these contracts. So if everybody is happy to roll their position over, they simply match up again.”
“Where you do see some movement is when, at expiration, the traders feel particularly bullish or bearish for the next quarter,” Tillier explains. “That creates an imbalance which results in market movement.”
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