Daily Agenda: EU Leaders to U.K.: Get On with It

EU leaders meet as Scotland explores new referendum; suicide bombers hit Istanbul airport; Energy Transfer Equity walks from Williams deal; Alcoa reveals split-up plan.

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The European Union summit yesterday took on a somber tone as European Union leaders expressed their regret over the U.K.’s decision to depart the EU, while urging outgoing U.K. Prime Minister David Cameron to begin the process as soon as possible to remove uncertainty from the markets. In a statement to reporters, German Chancellor Angela Merkel again reiterated her doubts that the situation was salvageable. European Commission President Jean-Claude Juncker, who has called for the U.K. to exit within weeks of the ascension of a new prime minister, will meet today with Scotland’s First Minister Nicola Sturgeon to discuss a referendum that would allow the semi-autonomous region of the U.K. to remain within the euro zone. The market reaction for U.S. investors has been swift: a rapid divergence between defensive sectors and a slumping broad equity market, combined with interest-rate derivatives markets that now imply no rate hike from the Federal Reserve for years to come.

Suicide bombers attack Istanbul airport. Multiple suicide bombers attacked Istanbul’s international airport yesterday, with 40 bystanders reported killed and more than 200 injured. In a televised response, Turkish Prime Minister Binali Yildirim stated that Islamic State forces were likely responsible and promised a swift military response. The attack is likely to further depress tourism for Turkey, which has suffered after a series of terrorist attacks in recent months.

Energy Transfer Equity walks away from Williams deal. Today Energy Transfer Equity announced a termination of its agreement to merge with Williams Cos. At the time the deal was announced last year, the total value of the combined firms, both pipeline companies, was more than $33 billion. The move came days after a Delaware court ruled that the initial merger agreement could be broken after Energy Transfer was unable to secure desired tax treatment for the new entity.

New technology IPO filing. Data management company Talend filed for an initial public offering in the U.S. yesterday, with an initial target of $86 million. The French-headquartered firm is a portfolio company of tech private-equity sponsor Silver Lake. The book runners for the deal include Goldman Sachs and J.P. Morgan.

Confidence indicators slip in Europe. The European Union released Euro zone economic confidence survey readings for June today. The headline Economic Sentiment Index registered at 104.4, lower than both the prior month and consensus forecasts. Sector-specific readings were mixed with declines in both business climate and services sentiment, but manufacturing executives registered an improvement in the mood.

Alcoa releases plan for split. In a filing made today, Alcoa provided details regarding the structure of the two separate entities into which it will split. In a move to help the credit rating of the manufacturing company, to be named Arconic, the core metals business, which will retain the Alcoa name, will borrow up to $1 billion that will then pass through to its sibling firm. Arconic will own approximately 20 percent of the new Alcoa.

Nike results spark concerns about growth prospects. Footwear and apparel giant Nike released fiscal fourth-quarter results yesterday. While the firm beat consensus analyst estimates for profits during the period at $0.49 per share, future orders were weaker than forecast, growing 11 percent versus the same period last year. This slowdown in retail order growth has contributed to inventories rising some 12 percent year-over-year.

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