Stock Market Today: June 13th - 17th

[Afomtop]

Markets could be skittish in the week ahead as the Federal Reserve meets and investors increasingly fret about whether the U.K. will vote this month to break away from the European Union.

The Fed is not expected to take action Wednesday, but the actions of other central banks will likely continue to be felt as their easing programs wash over global bond markets, sending some yields to record lows and driving buyers into the relatively better value of U.S. Treasurys. The European Central Bank added corporate debt to its purchases in the past week, adding more downward pressure on yields.

[afuiwipeyib]

Stocks meanwhile attempted to rally in the past week, with the Dow crossing back above 18,000 temporarily (http://www.cnbc.com/2016/06/10/us-markets.html) and the S&P 500 coming within range to take out its 2,132 all-time high. But stocks backed off toward the end of the week, as volatility increased, and European equities sold off hard. The dollar moved higher and oil and other commodities gave up gains. Gold was a standout (http://www.cnbc.com/2016/06/09/gold-holds-near-3-wk-high-set-for-second-weekly-rise.html), rising 2.7 percent. Sterling fell 1.7 percent against the dollar and the euro was down nearly a percent.

"I think you're in sort of the global growth fear mode again. This one may last longer because the Brexit vote is enough to keep those global growth fears alive, because if they [leave the EU], they may destabilize a region that's already struggling," said John Canally, economist and strategist at LPL Financial. A fear in the markets is that if the U.K. does choose to leave the euro zone, other countries will follow, destabilizing economies and bringing the demise of the euro.

[AgustinKasp]

The action in global bond markets is also likely to get attention, as investors focus on falling yields in a world that already has more than $10 trillion in negatively yielding debt.

"Low yields convey a sense of pessimism about the outlook for the economy and inflation, and it creates worry. This is why markets clearly indicate that they oppose negative policy rates," said Tony Crescenzi, strategist and portfolio manager at Pimco. "It's the optics of it." Crescenzi said he's seeing a rush of investors from Asia and Europe moving into U.S. Treasurys and corporate credit, a trend he expects to continue.

[ajzohrnd77]

Crescenzi said investors should be cautious, favoring higher grade bonds. He said he believes conditions in markets and economies are stable but not necessarily secure. "There's not a great fear about interest rate risk because of the great support that's provided by the central banks," he said.

Adrian Helfert, head of global fixed income at Amundi Smith Breeden, said the issue now is whether the central bank easing will really lift economies. He said it will be difficult for the Fed to raise rates in July. "They're actively worried about the U.S. economy and making sure this doesn't indicate a turn in the U.S. economy," he said.