Bear Radar

Style Underperformer:

• Large-Cap Value +1.0%

Sector Underperformers:

• 1) Foods +.1% 2) Gold & Silver +.1% 3) Utilities +.2%

Stocks Falling on Unusual Volume:

• SCOR, BW, WBC, LILA, MAN, TBRA, NTRA, TM, AHP, VVC, VIIX, FIZZ, QIHU, VRTS, DOW, ATHM, SHLM, DPS, FCN, MO, ASH, GIS, GOLD and TECD

Stocks With Unusual Put Option Activity:

• 1) XLY 2) NKE 3) XLI 4) FAST 5) DHI

Stocks With Most Negative News Mentions:

• 1) WBC 2) NAV 3) SCOR 4) DD 5) MAN

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.4%

Sector Outperformers:

• 1) Steel +3.5% 2) Biotech +3.3% 3) Disk Drives +2.8%

Stocks Rising on Unusual Volume:

• XNCR, LBTYA, SIVB, PUK, NXTM, GBT, EPAM, IPHI and AAL

Stocks With Unusual Call Option Activity:

• 1) JBLU 2) MET 3) TPX 4) NAV 5) AA

Stocks With Most Positive News Mentions:

• 1) ESV 2) KND 3) MU 4) OLN 5) EROS

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running +20.2% Above 100-Day Average
• 5 Sectors Rising, 5 Sectors Declining
• 86.4% of Issues Advancing, 12.5% Declining
• 94 New 52-Week Highs, 12 New Lows
• 42.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 33.9%
• Vix 19.7 -17.5%
• Total Put/Call .92 -28.7%
• TRIN/Arms .90 -48.1%

Tuesday Watch

Evening Headlines
Bloomberg:  

• Markets in Revolt Demand Action From Johnson’s Brexiteer Crew. If investors were disgruntled by Britain’s vote to quit the European Union, the ensuing leadership vacuum is only adding to their malaise. A second day of financial-market tumult is ramping up pressure on U.K. lawmakers to say when and how they’ll leave the world’s biggest trading bloc -- and who it is that will lead the negotiations. By 10 p.m. London time the pound was down another 3.3 percent after Friday’s record 8.1 percent plunge, while shares in banks and homebuilders tumbled and credit weakened. Britain’s credibility with money managers, won through the Conservative Party’s austerity measures and reforms, is rapidly dissipating. And that’s not being helped by comments from Boris Johnson, the leading “Leave” campaigner, that the downside of a Brexit has been “wildly overdone.” The risk is that -- just as in the financial crisis of 2008 or the ensuing euro-area debt crisis -- market volatility becomes so intense officials are rushed into action. “Politicians underestimate the importance of a plan,” said Guillermo Hernandez Sampere, the head of trading at MPPM EK in Eppstein, Germany. His firm manages about 250 million euros ($275 million). “It doesn’t matter whether from the Brexiteers or the government. They need to make clear how and as of when new arrangements with the EU will shape up.”
• World’s Top Fortunes Fall $196.2 Billion Since Brexit Bombshell. Global markets erased another $69.2 billion from the combined net worth of the world’s 400 richest people Monday, bringing the total since the U.K. shocked investors with a vote to leave the European Union to $196.2 billion in the last two trading days.
• Asia Stocks Fall as Brexit-Fueled Turmoil Offsets Stimulus Hopes. Asian stocks retreated after Monday’s rally as uncertainty surrounding the path of Britain’s exit from the European Union overshadowed optimism that central banks will move to shore up confidence. The MSCI Asia Pacific Index slid 0.9 percent to 124.66 as of 9:05 a.m. in Tokyo. Japan’s Topix index fell 1.6 percent as the yen traded at 101.71 per dollar. The U.K. was stripped of its top credit grade by S&P Global Ratings, and Fitch Ratings also lowered the country’s rank, the latest verdicts on the country’s decision to leave the European Union that has left it in political and economic paralysis.
• Gross Says U.S. Recession Odds May Be 30% to 50% Post-Brexit. The odds of a U.S. recession may be as high as 50 percent following last week’s vote in the U.K. to exit the European Union, according to Bill Gross, manager of the Janus Global Unconstrained Bond Fund. The yield on 10-year U.S. Treasury bonds may fall to 1.25 percent from about 1.45 percent on Monday, Gross said during an appearance on Fox Business Network. The lower yield would still be attractive to investors compared with negative interest rates in Japan or Germany. That spread could drive up the value of the dollar and increase the odds of a recession to the 30 percent to 50 percent range, according to Gross. While Britain represents a small part of the global economy, Friday’s vote will slow trade, immigration and growth around the world, which have driven economic expansion for years, he said. “This is the end of globalization as we know it,” Gross said.
• Abortion Access Expected to Grow Across U.S. After Court Ruling. By rejecting a Texas abortion law Monday, the U.S. Supreme Court has set in motion a reshaping of the legal landscape across dozens of states where similar attempts to impose debatable medical requirements on clinics and providers are now in jeopardy. The demands of those laws -- that clinics meet hospital standards and doctors obtain admitting privileges at nearby hospitals -- had been among the most potent tools of abortion opponents in recent years, shuttering providers and reducing access in the name of improved health. The majority of justices said those requirements overstepped the state’s interest in protecting women’s health, instead imposing undue burdens on their constitutional rights. 
• Worst of Brexit Pain Yet to Be Felt in U.S. Credit, Banks Warn. (video) Morgan Stanley and UBS Group AG are telling their clients to brace for deeper losses in U.S. credit as a result of the U.K. vote to leave the European Union. While the "leave" camp’s win in the U.K. referendum has already rattled markets and caused U.S. corporate bond spreads to surge the most since the European sovereign debt crisis, credit strategists at the two banks say the worst is yet to come. Bonds aren’t cheap enough to warrant taking the risk that the market volatility isn’t temporary. "Despite the urge to step in and buy U.S. credit at modestly wider levels than a few days ago, we recommend patience," Morgan Stanley strategists led by Adam Richmond wrote in a note to clients Monday. "While the full impact of the U.K. leave may not be known for some time, the U.S. economy is not in a position to withstand a large shock."

Wall Street Journal:

• Strengthening Currencies Bedevil Central Banks. Upward pressure on Japanese yen, Swiss franc and U.S. dollar complicates efforts by policy makers to spur growth. Britain’s vote to leave the European Union has set off a fresh round of currency pressures in the world’s largest economies, further complicating efforts by central banks to spur growth.
• The Fed’s Market Mover Keeps Changing His Mind. James Bullard has developed an unrivaled reputation for shifting his stance on whether the Federal Reserve should raise interest rates.
• Poll Finds Opening for Third-Party Candidates as Clinton, Trump Remain Unpopular. Deep dislike for the two leading candidates could scramble the race as some voters seek alternatives. Deep dislike for the two leading presidential candidates is creating an opening for third-party hopefuls, potentially scrambling the race as voters cast about for alternatives, a new Wall Street Journal/NBC News poll shows.

Fox News:

• DOJ to institute mandatory bias training. (video)

MarketWatch:

• How China’s yuan could be the currency whipping boy of Brexit. Bank of America cuts China’s 2016 GDP view given shifting trade outlook.

Zero Hedge:

• Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard. 
• The End Game Of Bubble Finance - Political Revolt.
• The Brexit Reaction Is The Reason Brexit Happened.
• Some Bad And Some Worse News For Stock Buybacks. (graph)
• The First Casualty Of Brexit: Italy Prepares €40 Billion Bank Bailout.
• Another Red Flag: Growth In Fast Food Visits Has Hit A Wall.
• Something Just Snapped In VIX. (graph)
• Behold Corporate Incest.
• Jim Rogers: Brexit Blowback "Worse Than Any Bear Market You've Ever Seen".
• "Death To All Zombies!"
• Chicago Is Pushing For A Massive Bailout Of Its Public School System.
• The Last Time Bonds Were Here, The Recession Started. (graph)
• Bonds & Bullion Bid But Brexit Blowback Batters Banks. (graph)

Business Insider:

• States are taking gun control laws into their own hands.
• Bernie Sanders is setting the stage for a convention fight over the Democratic platform.
• The UK just got hit with 2 downgrades.
• One of these 8 countries could be the next domino to fall.
• Even more internet censorship could be coming to China very soon.

Night Trading 

• Asian equity indices are -.75% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 150.25 -.5 basis point.
• Asia Pacific Sovereign CDS Index 56.0 +1.0 basis point.
• Bloomberg Emerging Markets Currency Index 71.06 +.27%. 
• S&P 500 futures +.58%. 
• NASDAQ 100 futures +.59%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (CCL)/.38
• (FDS)/1.63
• (AVAV)/-.10
• (NKE)/.48

Economic Releases  
8:30 am EST

• 1Q GDP (QoQ)is estimated to rise +1.0% versus a prior estimate of a +.8% gain.
• 1Q Personal Consumption is estimated to rise +2.0% versus a prior estimate of a +1.9% gain.
• 1Q GDP Price Index is estimated to rise +.6% versus a prior estimate of a +.6% gain.
• 1Q Core PCE (QoQ)is estimated to rise +2.1% versus a prior estimate of a +2.1% gain.  

9:00 am EST

• The S&P/CS 20 City MoM SA for April is estimated to rise +.6% versus a +.85% gain in March.

10:00 am EST

• Consumer Confidence for June is estimated to rise to 93.5 versus 92.6 in May.
• The Richmond Fed Manufacturing Index for June is estimated to rise to 3.0 versus -1.0 in May.
  

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Japan Retail Trade report and the (MA) general meeting could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by commodity and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on EU Disintegration Fears, Rising European/Emerging Markets/US High-Yield Debt Angst, Global Growth Worries, Financial/Commodity Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Heavy

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.82 -7.53%

• Euro/Yen Carry Return Index 117.48 -.95%

• Emerging Markets Currency Volatility(VXY) 11.46 +2.32%

• S&P 500 Implied Correlation 63.27 -4.83%

• ISE Sentiment Index 50.0 -7.41%
  

• Total Put/Call 1.30 +4.0%

• NYSE Arms 1.82 -20.31% 

Credit Investor Angst:

• North American Investment Grade CDS Index 91.09 +4.66%
  

• America Energy Sector High-Yield CDS Index 817.0 +11.10%

• European Financial Sector CDS Index 136.66 +8.72%

• Western Europe Sovereign Debt CDS Index 36.60 -.25%

• Asia Pacific Sovereign Debt CDS Index 56.25 +2.29%

• Emerging Market CDS Index 307.27 +1.59%
  

• iBoxx Offshore RMB China Corporate High Yield Index 129.95 +.03%

• 2-Year Swap Spread 11.75 -1.0 basis point
  

• TED Spread 38.5 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -39.0 +4.5 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.50 -.63%
• 3-Month T-Bill Yield .24% -1.0 basis point

• Yield Curve 86.0 -7.0 basis points
  

• China Import Iron Ore Spot $53.86/Metric Tonne +6.42%

• Citi US Economic Surprise Index -23.3 +.5 point

• Citi Eurozone Economic Surprise Index 3.0 -.8 point

• Citi Emerging Markets Economic Surprise Index -7.2 -1.3 points

• 10-Year TIPS Spread 1.37% -8.0 basis points
• 0.0% chance of Fed rate hike at Sept. 21 meeting, 0.0% chance at Nov. 2 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -124 open in Japan 
• China A50 Futures: Indicating -70 open in China

• DAX Futures: Indicating +30 open in Germany

Portfolio: 

• Slightly Higher: On gains in my index hedges and emerging markets shorts
  

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Today's Headlines

Bloomberg:   

• Germany, France Rule Out EU Talks Until U.K. Files to Leave Bloc. Germany, France and Italy said the European Union won’t hold talks with the U.K. on its future relationship with the EU until the government in London formally asks to leave the bloc. “We agree that there won’t be any informal -- or formal -- talks about Britain’s exit before the European Council has received the exit application,” German Chancellor Angela Merkel said Monday at a news conference with French President Francois Hollande and Italian Prime Minister Matteo Renzi in Berlin. “It’s surely not a matter of days, but we have to see to it that there’s no limbo. Britain has to take the first step.”
• Cameron Rejects Repeat Brexit Vote as U.K. Bank Stocks Plummet. (video) Prime Minister David Cameron rejected calls for a do-over vote on leaving the European Union and assigned a team of officials to prepare for withdrawal following the referendum last week that stunned the world and triggered financial-market turmoil. The pound extended its drop to touch the lowest against the dollar since 1985 and shares of some of Britain’s biggest banks plummeted after a weekend in which Cameron’s administration appeared rudderless. Scotland’s government also floated a referendum on its own independence, leaving the U.K. under the threat of breakup as well as the EU. While Brexit won’t be “plain sailing” as the country adjusts, “Britain is ready to confront what the future holds for us from a position of strength,” Cameron, who announced his intention to resign in the wake of the vote, told the U.K. Parliament on Monday. “Britain will be leaving the European Union but we must not turn our back on Europe or the rest of the world.”
• Pound’s Fresh Low Shows Market Meltdown Goes Beyond Mere Panic. (video) Traders have had three days to digest the Brexit vote, and the pound’s slide just keeps getting steeper. Sterling dropped 3.8 percent to $1.3160 at 4:02 p.m. in London on Monday, after reaching a three-decade low of $1.3121 that surpassed its weakest levels during the panicked selling on Friday that followed the U.K.’s decision to leave the European Union. The turmoil extended that day’s unprecedented 8.1 percent tumble and showed that Chancellor of the Exchequer George Osborne’s attempts to calm markets failed to cancel out the effects of the paralysis spreading through U.K. politics.
• Brexit Adds $380 Billion to Global Negative-Yielding Bond Pile. (video) A flight to safer assets by global investors after Britain’s decision to the quit the European Union has added $380 billion to the pile of negative-yielding government bonds. There are now $8.73 trillion of securities with yields below zero globally, according to the Bloomberg World Sovereign Bond Indexes, up from $8.35 trillion before the vote. In the euro-area, German benchmark bonds with maturities out to 10 years are negative, while Japanese 10-year yields reached a record-low of minus 0.215 percent on Friday.
• Credit Risk Climbs on Brexit for Second Day as Market Shuts Down. Corporate-credit risk soared for a second day as investors grappled with uncertainty following the U.K.’s vote to leave the European Union. The cost of insuring corporate debt against default climbed to the highest in about four months in Europe, amid heavy trading volumes, and the riskiest bank bonds fell. In the U.S., indexes of credit-default swaps extended Friday’s gains to reach the highest since March. No company offered bonds in Europe on Monday, as financial markets were rattled by the Brexit vote, the subsequent resignation of Prime Minister David Cameron and a lack of clarity about how and when the U.K. will leave the EU. There may be no bond sales of any type this week in Europe, according to a third of market participants surveyed by Bloomberg. “There is still a lot of uncertainty over what’s going to happen,” said Juan Esteban Valencia, a credit strategist at Societe Generale SA in Paris. “It’s not quite panic but people are concerned. We need to see how the situation shakes out.” The Markit iTraxx Crossover Index, which tracks credit-default swaps on mostly junk-rated companies, jumped 22 basis points to 411 basis points, the highest since Feb. 26, according to data compiled by Bloomberg. Gauges of swaps tied to investment-grade corporate debt and subordinated financial bonds also climbed to the highest since February. The risk premium on the Markit CDX North America Investment Grade Index, a credit-default swaps benchmark tied to investment-grade companies, jumped as much as two basis points to 89 basis points. It gained about 11 basis points on Friday, the biggest jump since October 2014. A similar gauge for high-yield bonds gained 10 basis points to 470 after surging 38 basis points Friday.
• EU Commission’s Juncker Faces Calls to Resign After Brexit Vote. Jean-Claude Juncker faced calls to resign as president of the European Union’s executive arm after the U.K. voted to quit the EU. Some EU governments believe the European Commission bears responsibility for the outcome of last week’s referendum in which 52 percent of U.K. voters supported an exit from the 28-nation bloc. Germany’s newspaper of record, the Frankfurter Allgemeine Zeitung, published an op-ed on Monday saying Juncker should stand down. Czech Foreign Minister Lubomir Zaoralek said that Juncker should have done more to persuade Britain to remain in the EU.
• HSBC, Nomura Fall in Asia as Brexit May Force Costly London Move. HSBC Holdings Plc and Nomura Holdings Inc. extended declines in Asian trading Monday on concern that Britain’s vote to leave the European Union may force banks with a large presence in the U.K. to undergo costly relocations. Nomura tumbled 6.3 percent at the close in Tokyo after losing 11 percent Friday, the biggest two-day slump since the aftermath of the nation’s March 2011 tsunami. London-based HSBC dropped as much as 2.6 percent in Hong Kong after sliding 6.6 percent Friday. Shares in Asian banks with less exposure to Europe generally held up better on Monday. HSBC’s Stuart Gulliver is among bank chiefs who have warned that they may have to shift jobs from the U.K. to elsewhere in Europe in the event of a Brexit vote. The U.K. quitting the EU raises the prospect of financial firms operating out of London losing so-called passporting rights that allow access to the region’s single market.
• Evercore, Lazard Post Worst 2-Day Fall Since 2008 on Brexit. Lazard Ltd. and Evercore Partners Inc. posted their biggest two-day declines since 2008, leading a slump of independent investment banks after the U.K. vote to leave the European Union. Lazard, run by Chief Executive Officer Ken Jacobs, plunged 12 percent to $27.56 at 12:29 p.m. in New York. Evercore dropped 13 percent. Both firms are down more than 20 percent since Thursday. Rivals including Moelis & Co., Greenhill & Co. and PJT Partners Inc. also extended declines on Monday.
• Investment Banks Face Hit From Brexit-Era Turmoil, Few Deals. Brexit is the last thing investment banks needed. Friday’s currency swoons and stock rout -- triggered by U.K. voters’ surprise decision to withdraw from the European Union -- herald even harder times for securities firms already struggling to improve earnings. While some desks made money in the initial turmoil, continued market volatility in the months ahead poses a threat to trading profits. And companies that hire banks to advise on takeovers and raise money face years of uncertainty as Britain negotiates new international ties. Analysts on both sides of the Atlantic cut earnings estimates for the biggest investment banks on the expectation that securities sales and major deals will be thwarted by economic and political uncertainty and currency swings. Fees from that business are likely to “tank,” dropping more than 30 percent this year at European banks, Sanford C. Bernstein analyst Chirantan Barua wrote. Analysts at Citigroup Inc. and JPMorgan Chase & Co. estimated lower underwriting volumes in the U.K. and Europe. “In light of such uncertainty, a lot of primary deals will be put on hold in equity and debt,” said Joseph Dickerson, an analyst at Jefferies International Ltd. in London. On the bright side, “the next week is going to be OK in terms of trading volumes.”
• Rajoy’s First Appeal for Support Stonewalled by Spanish Rivals. Caretaker Prime Minister Mariano Rajoy’s opening bid for support was rejected across the board as he began to try to piece together a governing majority in Spain. While Rajoy told Spaniards that he’ll have the foundations in place for a new government within a month, all three of his main rivals pledged to vote against him. Rajoy’s People’s Party established itself as the most powerful force in Spain after increasing its representation to 137 seats in Sunday’s general election, but he’s still 39 votes short of a majority in the 350-strong parliament. The Socialists, Podemos and Ciudadanos have 188 between them, enough to keep Rajoy out if they can hold their line. “My hand is still outstretched to guarantee the stability that Spain needs,” Rajoy said in a televised press conference Monday. “We need a government and we need it now.”
• Billionaire Soros Was ‘Long’ on Pound Before Vote on Brexit. (video) George Soros, the billionaire whose 1992 wager against the pound made hedge fund history, didn’t repeat the bet ahead of sterling’s record tumble on Friday. Soros was “long” the currency before Britain’s vote to leave the European Union on Friday, and didn’t “speculate against sterling while he was arguing for Britain to remain,” a spokesman said in an e-mailed statement Monday. “Because of his generally bearish outlook on world markets,” Soros did profit from other investments, according to the statement. “Now the catastrophic scenario that many feared has materialized, making the disintegration of the EU practically irreversible,” Soros wrote in a June 25 essay reflecting on the U.K. vote for Project Syndicate. “The consequences for the real economy will be comparable only to the financial crisis of 2007-2008.”
• China Weakens Yuan Fixing by Most Since August as Dollar Surges. (video) China weakened its currency fixing by the most since last August as global market turmoil spurred by Britain’s vote to leave the European Union sent the dollar surging. The People’s Bank of China set the reference rate 0.9 percent weaker at 6.6375 a dollar. A gauge of the greenback’s strength jumped 2.4 percent in the past two days, the most since 2011, as the British pound and the euro tumbled. The yuan dropped 0.3 percent to 6.6473 as of 6:44 p.m. in Shanghai, heading for its weakest close since December 2010.
• The Corner of Russia’s Economy Where Crisis Rages Unabated. As Russia’s government counts the months to an economic rebound, a bellwether of investment is nearing levels of distress last seen during the throes of a recession seven years ago. The value of construction works plunged 9 percent from a year earlier in May, the worst showing since October, even as industrial production grew for a second month and consumer indicators from real wages to unemployment improved. A gauge of business confidence in construction dropped to minus 19 last quarter, only two points above the trough reached in 2009, according to a report by an institute at the Higher School of Economics in Moscow. 
• Brexit Burns Mexico as Peso Plunge Spurs Wagers on Rate Increase. The U.K.’s vote to leave the European Union is reverberating loudly in Mexico. The peso tumbled the most since 2011 on Friday, hitting a record low in the wake of the results of the Brexit referendum. After weakening further Monday, it’s now down 10.2 percent this year, the biggest plunge among the world’s major currencies after the British pound. The U.K. vote and the peso drop prompted BNP Paribas SA to bring forward its forecast for an interest-rate increase in Mexico by six months to this week, and swaps traders to boost bets for higher borrowing costs by the most in a month. With the currency’s deepening slide threatening to fan inflation in Latin America’s second-biggest economy, central-bank officials led by Governor Agustin Carstens will probably lift the 3.75 percent benchmark as a “preventive move” when they meet Thursday, said Credit Suisse Group AG’s Alonso Cervera.
• Stock Pickers See Brexit Hurting India Tech to Mexico Cement. As investors sized up the shadow cast by Britain’s Brexit vote over emerging markets, everything from Turkish carmakers to Indian technology companies and a South African platinum producer came under the spotlight. Top of the at-risk list following Friday’s referendum result are companies and industries with the strongest ties to the U.K. and Europe, where demand for consumer products may slow in the aftermath of the trading bloc’s fracture. Here are some of the industries and stocks most exposed to Brexit based on their dependence on sales in Britain, as well as how much they will suffer from currency depreciation, according to analysts from JPMorgan Chase & Co. and other institutions.
• European Stocks Slide as Brexit Fallout Concern Spurs Bank Rout. (video) European stocks slid for a second day, extending losses as investors continued to speculate on the fallout from Britain’s shock vote to leave the European Union. U.K. banks led a gauge of European lenders to its lowest level since 2011, with Royal Bank of Scotland Group Plc tumbling 15 percent, while Barclays Plc slid 17 percent. Close Brothers Group Plc and Schroders Plc paced financial-services stocks to the worst performance of the 19 industry groups on Stoxx Europe 600 Index. EasyJet Plc dragged travel-and-leisure companies lower, sliding 22 percent after warning that a drop-off in travel demand arising from a Brexit will pare earnings over the rest of summer period. The Stoxx 600 slipped 4.1 percent to 308.75 at the close of trading. Shares tumbled the most since 2008 on Friday as the Brexit win set the stage for months of uncertainty while the U.K. negotiates its exit from the bloc. The FTSE 100 lost 2.6 percent even as Chancellor of the Exchequer George Osborne sought to reassure financial markets by saying that a contingency plan is in place to shore up the U.K. economy. The volume of European shares changing hands today was two-and-a-half times the 30-day average, while for British equities, it was threefold.
• Brexit Brings New Headache to U.S. Retailers Struggling at Home. The U.K.’s vote to leave the European Union sent shares of U.S. retailers tumbling for a second day on concern that overseas woes will compound the companies’ sluggish sales. The Brexit vote threatens to hurt a top source of visitors to the U.S. and further strengthen the dollar, worsening two of the main headwinds that have been affecting U.S. retailers. Those concerns only exacerbate the companies’ domestic challenges, which include restrained consumer spending, a shift to online retailing, and declining mall traffic. Shares of PVH Corp., Tiffany & Co. and Ralph Lauren Corp. have been among the hardest hit by the last two trading days of Brexit fallout.
• Trump Embraces Executive Orders to Avoid Congressional Gridlock. Here are 13 policies Trump has proposed that he could accomplish without help from Congress.

Wall Street Journal:

• Dining Out Falls Victim to Economy. Growth has slowed in last three months, a sign of jitters over economic uncertainties. Restaurant visit growth has completely stalled in the last three months, signaling that consumers, jittery over economic uncertainties, are retrenching. Visits to fast-food restaurants had been growing at a quarterly clip of 2% since September 2015, but haven't grown at all in March, April or May, according to as-yet-unpublished..

Fox News:

• Supreme Court strikes down Texas abortion law. (video)

CNBC:

• Millennials can't afford health insurance, adopt risky alternatives.

Zero Hedge:

• President Of The European Parliament: "It Is Not The EU Philosophy That The Crowd Can Decide Its Fate".
• S&P Downgrades UK From AAA To AA Due To Brexit: Full Text. (graph)
• European Banks Crash To Worst 2-Day Loss Ever As Default Risk Soars. (graph)
• These Three Survey Responses Explain Everything That Is Wrong With The US Economy.
• Deutsche Bank: "There's No Escaping The Fact That This Is A Class War".
• "This Is A Recession" - Dallas Fed Workweek Hits 7-Year Low. (graph)
• Oil Tumbles Amid Bad News For Glut As US Offshore To Hit Record In 2017. (graph)
• US Banks Are Crashing. (graph)
• In Major Win For Abortion Advocates, Supreme Court Voids Texas Abortion Clinic Law.
• US Services Economy Disappoints As 'Optimism' Plunges To Record Lows. (graph)
• European Banking Stocks Collapse As UK Default Risk Spikes. (graph)

The Telegraph:

• Brexit the 'tip of the iceberg' as vote risks EU's destruction.