(Bloomberg) -- U.S. stock-index futures fell, indicating more losses for the S&P 500 as investors fretted about prospects for global growth in the wake of the U.K.'s decision to leave the European Union.
S&P 500 futures contracts expiring in September fell 0.7 percent to 2,069.25 at 7:34 a.m. in New York. The benchmark yesterday snapped its longest winning streak in three months after comments from Bank of England's governor rekindled concerns that the fallout from Brexit will further weigh on tepid global growth. Futures on the Dow Jones Industrial Average lost 111 points, or 0.6 percent, to 17,651 today.
U.S. stocks look set to mirror declines in global equities and a weakening pound as the knock-on effects of the U.K.'s vote start to materialize. Three asset managers froze withdrawals from U.K. real-estate funds on Tuesday following a flurry of redemptions, while data on Wednesday showed German factory orders were unchanged in May, disappointing forecasters who had called for an increase.
“Last time in 2008, the financial crisis started with funds not making redemptions, and while another financial crisis is not my main scenario, it's making people nervous,”said Christian Zogg, head of equity and fixed income at LLB Asset Management in Vaduz, Liechtenstein. “The U.S. market is the most expensive one so I do not think is can go up from where it is without other markets recovering significantly.”
Before yesterday's decline, the S&P 500 capped its strongest weekly rise since November, boosted by assurances that central banks are prepared to loosen monetary policy to limit the fallout from Brexit. The benchmark is trading at 16.6 times estimated earnings, a higher valuation than the MSCI All-Country World Index and above its own three-year average.
While traders have pushed back bets for the next Federal Reserve rate increase until at least 2018, investors will assess data on services and minutes from the central bank's June meeting, due later today, for signs on the health of the economy.
Among shares active in premarket trading, Netflix Inc. fell 2.6 percent after Jefferies Group LLC downgraded the shares to underperform, similar to sell. Gold producers Newmont Mining Co. and Coeur Mining Inc. gained at least 2.5 percent as precious metals climbed.
To contact the reporter on this story: Camila Russo in Madrid at crusso15@bloomberg.net. To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net, Namitha Jagadeesh
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