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* S&P 500, Dow modestly down, Nasdaq up slightly; small caps outperform

* Materials weakest major S&P sector; energy leads gainers

* Euro STOXX 600 index up ~flat

* Dollar ~flat; gold down, crude up; bitcoin up ~4%

* U.S. 10-Year Treasury yield ~1.47%

June 14 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

TAPERING PLAYBOOK (0934 EDT/1334 GMT)

With less than 24 hours left before the Fed kicks off its June policy meeting, markets look to be fairly relaxed about the impact of any move by the U.S. central bank to start normalizing policy.

Reflecting the easy mood is JPMorgan who says the upcoming start to the tapering process "is unlikely to hurt our bullish view on DM equities for 2H".

Part of this optimism is derived after looking at market moves during the latest bond tapering episode back in 2013.

Here's a summary of what happened then, courtesy of Mislav Matejka, strategist at the U.S. investment bank:

1. Developed Market equities weathered the process very well, post the small initial wobble. In contrast, EM equities fared relatively poorly

2. Bond yields were subdued ahead of the tapering announcement, and moved significantly higher in its aftermath, but, interestingly, peaked out once the actual tapering was implemented

3. Ahead of the tapering announcement, internals had a marginal tilt towards Cyclicals vs Defensives. From the tapering announcement to actual implementation, Cyclicals performed very strongly vs Defensives. Post the start of tapering, over the ensuing 6-12 months, the leadership turned decisively more defensive.

(Danilo Masoni)

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BREXIT: THE SAUSAGE AND THE POUND (0923 EDT/1323 GMT)

Among the key takeaways of the G7 summit in Cornwall over the weekend, one had little to do with COVID-19, the fight against climate change or the tensions brewing with Russia and China.

"The meeting reminded us that Brexit never goes away", writes Paul Donovan, chief economist at UBS GWM, who's been referring to the UK's exit from the European Union as a "interminably tedious" issue for some years now.

The current "sausage war" about checks on chilled meats moving from the island of Great Britain to Northern Ireland is another example of how Brexit is so full of surprises and provides endless news cycles.

"Everything has an end but Brexit" was the headline of the daily currency briefing of the FX team at Commerzbank which looked at how the sausage war could impact the pound.

"If the EU was to become more concrete on its threats in the next few days Sterling would record further losses", they argued.

Another harsh headline came from George Lagarias, chief economist at Mazars, who issued a note on the "The forever-war that is Brexit".

Lagarias, just as the Commerzbank analysts, also focused on how the risk of a trade war could weigh on the pound.

"We wouldn’t be too surprised if investors question whether the pound, which is still near post-Brexit highs, is fairly valued, especially as other countries have caught up on vaccinations".

There is a sense across pundits that finding an acceptable modus operandi for Northern Ireland is unlikely at the moment and that EU-UK tensions is just part of the new Brexit normal.

"Johnson is stuck in his ultimately unresolvable, yet consciously self-inflicted, dilemma of wanting to have his cake and eat it too vis-à-vis the EU", wrote Erik F. Nielsen, Group Chief Economist at UniCredit.

In the meantime, it's fair to say that even with the prospect of a further delay to the reopening of the British economy, investors are not frantically selling sterling to buy continental sausages.

Cable is up 0.02% at the moment and the euro is up a mere 0.08% against the pound which has been doing quite all right lately thank you very much:

Here's some reading on the issue:

EU and UK's 'sausage war' sizzles at G7 as Macron and Johnson spar

Ex-EU Brexit negotiator Barnier: UK reputation at stake in Brexit row

Brexit tensions are a test for Europe, says French minister

(Julien Ponthus)

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NASDAQ COMPOSITE: RENEWED VIGOR (0900 EDT/1300 GMT)

The Nasdaq Composite ended Friday within 0.5% of its April 26 record close and 1% from its April 29 record intraday high.

Meanwhile, one measure of the Nasdaq's internal strength has already been hitting fresh record highs:

Nasdaq's cumulative net new highs (NNH) (running sum of new highs - new lows), on a weekly basis, bottomed in early April 2020, and has been trending up, above its 12-week moving average $(WMA.AU)$, for 55 straight weeks. The measure ended Friday at an all-time high of just over 178.5k vs its 12-WMA at 175.6k.

Looking back over the past 6 years or so, periods when cumulative weekly NNHs were above its 12-WMA have coincided with Nasdaq strength. Conversely, periods when cumulative NNHs were below the 12-WMA have occurred amid Nasdaq instability.

More recently, since its February 12 peak, which also coincided with the Composite's weekly closing high, the spread between the measure and its 12-WMA had been sharply deteriorating, underscoring waning upside momentum.

However, in the wake of a near 5%-IXIC sell off from February 12 to May 21, the spread bottomed ahead of its zero line, and has now widened for 3 straight weeks.

As long as this new widening trend remains in force, the Composite's renewed vigor may have legs.

(Terence Gabriel)

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FOR MONDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE:

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(Terence Gabriel is a Reuters market analyst. The views expressed are his own)