OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU16 -3.88%) are down sharply by -4.04% to a 3-1/4 month low and European stocks plunged -9.12% to a 4-1/2 month low after voters in the UK voted to leave the European Union. The Brexit vote to "Leave" the EU shows 52% in favor versus 48% for "Remain." The British Pound sank to a 30-3/4 year low and UK Prime Minister Cameron, a staunch supporter of the UK remaining in the EU, resigned after the vote to leave the EU. The Sep mini S&P sank as much as -5.1% in overnight trade which triggered a trading curb that means the contract cannot move below that level until the opening of regular trading. Stocks plunged around the world and government bond markets soared on concern that the UK may fall into recession if it leaves the EU, which in turn will cause a European and global recession. Gold prices (GCQ16 +4.60%) surged +4.93% to a 2-1/4 year high on increased safe-haven demand and the 10-year German bund yield plummeted to a record low of -0.17%. Asian stocks settled sharply lower: Japan -7.92%, Hong Kong -2.92%, China -1.30%, Taiwan -2.30%, Australia -2.17%, Singapore -2.09%, South Korea -2.88%, India -2.24%. The plunge in global bourses fueled a rally in the yen on safe-haven demand as USD/JPY sank to a 2-1/2 year low, which sent Japanese exporter stocks into a tailspin and the Nikkei Stock Index fell to a 1-1/2 year low.

The dollar index (DXY00 +2.41%) is up +2.46% at a 3-1/4 month high. EUR/USD (^EURUSD) is down -2.81% at a 3-1/2 month low. USD/JPY (^USDJPY) is down -3.79% at a 2-1/2 year low.

Sep T-note prices (ZNU16 +1.70%) are up +2-18.5/32 points at a new contract high.

Dallas Fed President Kaplan (non-voter) said that accommodation should only be removed "based on realistic assessment of economic conditions." He added that he has been "strongly persuaded by arguments that aging demographics in advanced economies, a decline in productivity growth, and the continued emergence of the U.S. as a source of safe assets have all contributed to the decline in the neutral level of interest rates."

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) May durable goods orders (expected -0.5% and +0.1% ex-transportation, Apr +3.4% and +0.5% ex-transportation), (2) final-June University of Michigan U.S. consumer sentiment index (expected -0.2 to 94.1, prelim-Jun -0.4 to 94.3), (3) USDA Q2 Hogs & Pigs Inventory, (4) USDA May Cold Storage, and (5) USDA May Cattle on Feed.

None of the Russell 1000 companies report earnings today.

U.S. IPO's scheduled to price today: none.

Equity conferences today: none.

OVERNIGHT U.S. STOCK MOVERS

Accenture PLC (ACN -0.10%) was downgraded to 'Neutral' from 'Outperform' at Credit Suisse with a price target of $120.

Danaher (DHR +1.41%) was upgraded to 'Outperform' from 'Market Perform' at Bernstein.

Albemarle (ALB +1.30%) climbed 1% in after-hours trading after it was announced that it will replace TECO Energy in the S&P 500 after the close of trading on Thursday, June 30.

Darden Restaurants (DRI +1.19%) were upgraded to 'Buy' rom 'Neutral' at Tigress Financial Partners.

Fortive Corp. ({=FTV-W=}) will replace Columbia Pipeline Group CPGX in the S&P 500 after the close of trading on Friday, July 1.

Inteliquent (IQNT +3.90%) rose nearly 4% in after-hours trading after it was announced that it will replace Emcor in the S&P Smallcap 600.

Sonic (SONC +2.88%) sank 8% in after-hours trading after it reported Q3 system same-store-sales of up +2.0%, weaker than consensus of up +2.4%, and then cut its full-year view for same-store-sales to up 2%-4% from a May 17 projection of up 4%-6%.

Oracle (ORCL +2.05%) was rated a new 'Outperform' at Cowen with a 12-month price target of $46.

U.S. bank stocks may be active today after the Fed Stress tests, released after markets closed Thursday, showed that all 33 banks exceed the minimum capital ratios.

Synnex (SNX +1.14%) rallied over 4% in after-hours trading after it reported Q2 adjusted EPS of $1.37, better than consensus of $1.31.

Arista Networks (ANET +3.45%) dropped 4% in after-hours trading on concern its products could be banned from the U.S. because they infringe on patents owned by Cisco, according to a statement on the website of the U.S. International Trade Commission (ITC).

National Storage Affiliates Trust (NSA -0.87%) was rated a new 'Buy' at DA Davidson with an 18-month target price of $25.

Emerge Energy Services LP (EMES +2.58%) gained nearly 4% in after-hours trading after it sold a fuel unit to Sunoco for $178.5 million.

MARKET COMMENTS

September E-mini S&Ps (ESU16 -3.88%) this morning are down sharply by -85.00 points (-4.04%) at a 3-1/4 month low. Thursday's closes: S&P 500 +1.34%, Dow Jones +1.29%, Nasdaq +1.42%. The S&P 500 on Thursday rose sharply to a 2-week high and closed higher on carryover support from a rally in European stocks to a 3-week high on optimism that Britain would vote to remain in the EU. Stocks were also boosted by news of the -18,000 decline in U.S. weekly initial unemployment claims to an 8-week low. Stocks were undercut by news that U.S. May leading indicators unexpectedly fell -0.2%, weaker than expectations of +0.1%.

Sep 10-year T-note prices (ZNU16 +1.70%) this morning are up sharply by +2-18.5/32 points at a contract high. Thursday's closes: TYU6 -17.00, FVU6 -9.25. Sep T-notes on Thursday dropped to a 2-week low and closed lower on reduced safe-haven demand as global stocks rallied sharply on optimism that the UK would vote to remain in the EU. T-notes were also undercut by the bigger-than-expected decline in U.S. weekly jobless claims and by increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 1-week high.

The dollar index (DXY00 +2.41%) this morning is up +2.297 (+2.46%) at a 3-1/4 month high. EUR/USD (^EURUSD) is down -0.0320 (-2.81%) at a 3-1/2 month low. USD/JPY (^USDJPY) is down -4.02 (-3.79%) at a 2-1/2 year low. Thursday's closes: Dollar Index -0.187 (-0.20%), EUR/USD +0.0089 (+0.79%), USD/JPY +1.75 (+1.68%). The dollar index on Thursday sold off to a 1-1/2 month low and closed lower on strength in GBP/USD which rallied to a 5-3/4 month high on optimism that the UK would vote to remain in the European Union. EUR/USD also rallied on reduced Brexit concerns and on signs of economic strength after the Eurozone Jun Markit manufacturing PMI unexpectedly rose +1.1 to 52.6, stronger than expectations of -0.1 to 51.4 and the fastest pace of expansion in 6 months.

Aug WTI crude oil (CLQ16 -4.85%) this morning is down -$2.46 a barrel (-4.91%). Aug gasoline (RBQ16 -4.18%) is down -0.0675 (-4.19%). Thursday's closes: CLQ6 +0.98 (+1.99%), RBQ6 +0.0168 (+1.05%). Aug crude and gasoline on Thursday closed higher on the slide in the dollar index to a 1-1/2 month low and on reduced Brexit concerns that fueled a sharp rally in global stocks.

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