All eyes are on Europe as stocks closed the week on a downtick on heavy volume. Today marks “triple witching” with options expiring for the month of June. The Dow Jones closed off 57 points to 17,675. For the week the Dow lost about 1%.
As the Brexit vote nears people are trying to figure out which way it will go. The opinion polls show people favor leaving but the bookmakers are saying there is a 60% chance they will vote to stay as part of the European Union. The difference betwixt these two methods are that polls show current opinion while the bookmakers look at probabilities. The reason why the probability is at 60% is because history shows that undecided voters tend to make up their minds just before they vote and in doing so they tend to favor the status quo. This was seen in the Scottish vote and the French Canadian vote a few years ago where polls showed these measures winning but then went down in defeat as the undecideds voted in favor of the status quo. If history is any guide then Britain will stay part of the EU. Even the DBI or Deutsche Bank indicator turned positive today and reversed higher after hitting lows. If Britain stays however Europe still has many issues to confront from Greece to an Italian banking crisis to the migrant crisis.
After falling all week WTI crude oil bounced up 4.1% today to close at $47.98 per barrel.
Gold finished a strong week of gains gaining $2.90 an ounce to close at $1,301. Gold has now been up three weeks in a row. Market uncertainty is sparking buying by international investors looking to hedge paper currency risks with gold and silver.