Week ahead: Brexit fallout, Puerto Rico bill in the Senate

Investors will be eagerly awaiting the opening of trading Monday morning to see if the weekend helped markets calm down after the United Kingdom’s shocking decision to leave the European Union.

The value of the pound sterling and securities plunged overnight Thursday as Britain’s exit from the EU became apparent. Markets tanked Friday morning, with the Dow Jones Industrial Average dropping 500 points on open and the NASDAQ and S&P 500 falling sharply too.

{mosads}In a joint statement, the finance ministers and central bank governors of the G-7, which includes the U.S. and Britain, said they would be monitoring financial markets closely and doing what they can to support them.

“G7 central banks have taken steps to ensure adequate liquidity and to support the functioning of markets. We stand ready to use the established liquidity instruments to that end,” they said.

In a separate statement, the Federal Reserve said it was “carefully monitoring” financial markets and is prepared to provide dollar liquidity to other central banks if necessary. It noted that “pressures in global funding markets” could lead to “adverse implications for the U.S. economy.”

The House is in recess until after the Fourth of July holiday, but the Senate will likely vote to send debt relief for Puerto Rico to President Obama’s desk before they leave for the holiday.

Senate Majority Leader Mitch McConnell (R-Ky.) is expected to schedule the vote for Thursday.

But there could be roadblocks. Many Democratic senators have yet to warm to the legislation and some want changes. And Sen. Bob Menendez (D-N.J.) hasn’t ruled out trying to block the bill if there are no chances to amend it. But with Puerto Rico facing a massive debt bill on July 1, lawmakers have little time to spare.

The Senate will also face a contentious funding issue in the week ahead.

Republicans have agreed on a $1.1 billion bill to help address the Zika virus. House lawmakers pushed the bill through before leaving for the July 4 recess.

But Democrats are rejecting the bill, saying it takes funding away from other health priorities and isn’t enough to adequately handle the Zika threat.

The White House has also threatened a veto, but Senate Republicans are likely to go ahead with a vote.

Your full week ahead:

Tuesday:

• Senate Finance Committee: Hearing entitled “Examining the Proposed Medicare Part B Drug Demonstration,” 10 a.m. http://1.usa.gov/28QApUG.
• Senate Health, Education, Labor and Pensions Subcommittee on Primary Health and Retirement Security, 2 p.m. http://1.usa.gov/28QEmso.

Wednesday:

• Senate Judiciary Committee: Hearing to examine protecting older Americans from financial exploitation, 10 a.m. http://1.usa.gov/28TgXqL.
• Senate Small Business Committee: Hearing to examine the consequences of dwindling startup activity, 10 a.m. http://1.usa.gov/28VWjsX.

Thursday:

• Senate Small Business Committee: Hearing to examine small business survival amidst flood insurance rate increases, 10 a.m. http://1.usa.gov/28Whqfh.

Recap the week with Overnight Finance:

Monday: Study says Trump would cause recession | GOP wants Obama out of ‘Brexit’ fight | Busy week for Yellen | Republicans target IRS power

Tuesday: Yellen’s dire ‘Brexit’ warning | GOP measure could keep Tubman off $20 | Lew pitches Puerto Rico bill to Senate Dems

Wednesday: Anxiety grows over Brexit vote | Investors prefer Trump to Clinton in poll | Key chairman open to censuring IRS chief

Thursday: Wall Street awaits Brexit result | Clinton touts biz support | New threat to Puerto Rico bill? | Dodd, Frank hit back

Today’s stories:

• Britain votes to leave European Union, by Peter Schroeder
• Markets tank following Brexit vote, by Peter Schroeder
• Fed, Group of 7 monitoring markets after Brexit vote, by Peter Schroeder and Vicki Needham
• GOP senators: Brexit vote a wake-up call, by Jordain Carney
• Clinton campaign: Brexit drama builds case against Trump, by Peter Schroeder
• House Republicans roll out new blueprint for tax reform, by Naomi Jagoda
• Republican chairman: Our tax reform plan fits with Trump’s vision, by Naomi Jagoda

Other stories from the week:

• Obama: My kids won’t work on Wall Street, by Peter Schroeder
• Clinton campaign touts endorsements from business leaders, by Harper Neidig
• Judiciary chairman open to censuring IRS chief, by Naomi Jagoda
• GOP draws battle line with ObamaCare alternative, By Peter Sullivan
• White House ramps up pressure to pass TPP this year, By Vicki Needham
• Fed chairwoman blasts Trump on debt, By Peter Schroeder

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