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Amid heightening Brexit tensions, European leaders are arriving for the second and final day of talks in Brussels, where an outline for a new road map for global economic policy makers is expected. Heads of EU governments told Britain yesterday to act quickly to resolve the political and economic confusion unleashed by its vote, while Mario Draghi said the decision could reduce eurozone growth by a cumulative 0.3%-0.5% over the next three years.

Scottish First Minister Nicola Sturgeon is also heading to Brussels to meet European Commission President Jean-Claude Juncker, saying on Twitter that it was "Day 1" of the fight to protect her nation's place in Europe. The SNP leader has started legislation on a new referendum for Scottish independence - a move that would risk a break up of the U.K. - after the country overwhelmingly voted to remain part of the kingdom in September 2014.


Germany's Angela Merkel sees no reason to halt TTIP negotiations because of Britain's decision to leave the EU, stating "there was a clear mandate to continue the talks." What about a trade deal between the U.S. and U.K.? Speaking in Colorado, John Kerry was asked about President Obama's April comment that Britain would go to the "back of the queue" if it voted to quit the EU. A cryptic reply by the Secretary of State led a DOS spokesman to later clarify that Kerry didn't mean to suggest any plan for separate, simultaneous negotiations.

Three suicide bombers opened fire then blew themselves up in Istanbul's main international airport on Tuesday, killing 40 people and wounding close to 150 in what Turkey's prime minister said appeared to have been an attack by Islamic State. Ataturk is the world's eleventh busiest airport and the third busiest in Europe with over 60M passengers a year.

The global stock rally is extending into a second day, with banks leading the charge after the Dow and S&P posted their best day in four months. Speculation is high that policy makers will take steps to limit any economic fallout and mitigate the "damage" of the U.K.'s vote to leave the European Union. A dead cat bounce or are markets slowly moving away from Brexit fears?



Moody's has cut its outlook on the British banking system from stable to negative following last week's referendum. "We expect lower economic growth and heightened uncertainty over the U.K.'s future trade relationship with the EU to lead to reduced demand for credit, higher credit losses and more volatile wholesale funding conditions," the agency declared. Related tickers: BCSHSBCSANAVPUKOTCPK:TSBBYOTC:SLFPF,OTCPK:LGGNY

The Fed will tell 33 of the nation's largest banks today whether they fully passed or failed their annual stress tests. Traders are closely watching the CCAR reports to see whether lenders can afford their planned dividends and buybacks, and if Wall Street has enough capital to survive another financial crisis. U.S. units of Deutsche Bank (NYSE:DB) and Banco Santander (NYSE:SAN) were the only firms to fail the tests in 2015.

Energy Transfer Equity has terminated its merger agreement with Williams Cos. (NYSE:WMB) after a court ruled that it can walk away from the deal since it was unable to deliver a required tax opinion by June 28. Williams remains committed to completing the merger and will "enforce its rights" under the terms of its agreement, the company said in a statement. The deal had been valued at nearly $33B when it was signed last year. ETE+1.3%; WMB -3.6% premarket.

Alcoa investors are hoping for more detail this morning on how the biggest U.S. aluminum producer will divide about $13B of liabilities as it prepares to split itself into two. That will show whether CEO Klaus Kleinfeld can achieve his target of an investment-grade manufacturing company, retitled Arconic, and a viable aluminum-producing company retaining the Alcoa name (NYSE:AA).

Despite an export-denting surge in the yen post-Brexit, Sony (NYSE:SNE) is keeping its operating profit target of ¥500B ($4.9B) unchanged for the 2017-2018 fiscal year. If achieved, that would be the highest in two decades. Sony also lifted the sales target of its games division on hopes for its new VR headset and said it would re-enter robots a decade after it last abandoned the business.

A dysfunctional Senate split along party lines has blocked a $1.1B proposal to fight the Zika virus, leaving just two weeks to reach a deal before lawmakers leave for a summer recess in the midst of mosquito season. Democrats accused Republicans of sabotaging the legislation with provisions designed to deny new funding for Planned Parenthood clinics in Puerto Rico and ease rules on pesticide spraying. Related tickers: SNYINOAEMDXON,CEMIBCRXTMOCERSOTCQB:GOVX

Dave Cote will step down as chief executive of Honeywell (NYSE:HON) next March, ending a 14-year tenure during which he revived the fortunes of the industrial conglomerate. He will be succeeded by Darius Adamczyk, who was named the company's president and chief operating officer in April. Cote will continue as executive chairman through April 2018, and then start a five-year consulting and noncompete agreement.

Airbnb is in talks for a new investment round that would value the rental listing service at around $30B, NYT reports. That would give Airbnb (Private:AIRB) the second-highest valuation among U.S. start-ups, behind only Uber (about $62.5B) - and triple Airbnb's valuation from two years ago. Funds would go toward international expansion, a source told the paper, in addition to a $1B debt facility the company has reportedly secured.

Production at five Norwegian oil and gas fields will shut if oil workers and employers fail to settle a wage deal by July 2, according to the Norwegian Oil and Gas Association. The fields that would be impacted are operated by ExxonMobil (NYSE:XOM), Engie (OTCPK:ENGIY) and BASF's (OTCQX:BASFY) oil and gas unit Wintershall. Workers on three Statoil-operated (NYSE:STO) fields also plan to strike unless a deal is agreed, but would not have to shut in the initial phase of the conflict.

A head-on collision of two freight trains in the Texas panhandle yesterday caused a massive explosion and prompted an evacuation from the area. The two BNSF Railway (BRK.ABRK.B) trains were on the same track when they collided near the town of Panhandle, northeast of Amarillo; each train carried two crew members, and three of the people haven't been found.

Toyota is calling back 2.87M vehicles across the globe over a possible fault with their evaporative fuel emissions control unit. The move affects the hybrid Prius, Auris compact hatchback and Corolla compact produced between April 2006 and August 2015. Toyota (NYSE:TM) is separately recalling 1.43M Lexus CT200h and Prius cars worldwide because of a potential airbag inflator defect.

Vodafone is considering moving its headquarters out of the U.K. given the uncertainty about how many "positive attributes" of being in the EU will remain once the country has left the bloc. The majority of Vodafone's (NASDAQ:VOD) customers, employees and suppliers are based outside Britain. As a result, more than half of the company's earnings were attributed to European businesses in this financial year, while the U.K. accounted for just 11% of profits.

Braving the post-Brexit volatility, Molson Coors (NYSE:TAP) is selling $5.3B of bonds in the first U.S. investment grade bond deal since the U.K. voted to leave the EU. The bonds will partly fund the purchase of SABMiller's (OTCPK:SBMRY) stake in MillerCoors. According to sources, investors submitted orders in excess of $30B for the four tranches, showing strong appetite.

Coca-Cola expects to pull some of its beverages from Vermont stores this week as the state imposes a new law requiring all products made with genetically modified organisms to include warning labels. Although its top beverages will stay on shelves, including Coca-Cola (NYSE:KO), Diet Coke and Coke Zero, some smaller brands or configurations may temporarily disappear. Kellogg (NYSE:K), Campbell Soup (NYSE:CPB) and Mars previously announced they would bow to the Vermont law and begin labeling their products for GMOs.

Tuesday's Key Earnings

Carnival (NYSE:CCL+0.2% after beating expectations.
Nike (NYSE:NKE-3.7% AH on sluggish North American sales.

Today's Markets 

In Asia, Japan +1.6% to 15567. Hong Kong +1.3% to 20436. China +0.7% to 2932. India+0.8% to 26740. 
In Europe, at midday, London +2.3%. Paris +2.6%. Frankfurt +1.9%
Futures at 6:20, Dow +0.6%. S&P +0.7%. Nasdaq +0.8%. Crude +1.3% to $48.48. Gold+0.1% to $1319.80. 
Ten-year Treasury Yield flat at 1.46%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Personal Income and Outlays
10:00 Pending Home Sales
10:30 EIA Petroleum Inventories
3:00 Farm Prices


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