U.S. and International stocks declined last week, while Treasuries and corporate bonds posted solid gains.
It was a surprising result Friday morning as Britain voted to leave the European Union (EU). Stocks gave up weekly gains with the S&P 500 closing down 1.6% for the week to 2,037. While stocks fell, bond prices increased. The market is now pricing in a higher chance for a rate cut in the coming months rather than a rate hike. Britain's exit from the EU will not happen overnight. It has been well-reported that there is a two-year exit process. European banks performed very poorly, some seeing declines of 20% or more on record volume. Companies with prominent U.S. exposure, like Casey's General Store (CASY), CVS Health (CVS), and Dollar General (DG) outperformed the rest of the market.
Looking at some specific company events, Disney (DIS) had an impressive week. The new movie, Finding Dory, set box office records after an opening weekend haul of $136 million. Disney's ABC had a record viewership for the NBA Finals Game 7 between Cleveland and Golden State. It was the most viewed basketball game since Michael Jordan played in the league. Finally, ESPN, owned by Disney, signed a media agreement with the Big Ten for $1.1 billion. Adobe (ADBE), FedEx (FDX), and Finish Line (FINL) reported solid earnings results last week.