Disappointing US corporate earnings add pressure to markets

Friday, July 25, 2014

European equity markets retreated in today’s trading session, while the euro and sterling came under renewed pressure as the US dollar continued its strong upside rally. The CAC, DAX and the London benchmark fell sharply between 0.45% and 1.8%.

In the US, the Dow Jones plunged more than 130 points (-0.8%), following disappointing corporate earnings results from Amazon, which weighed on market sentiment.

Dow Jones Index

INDU Index (Dow Jones Industrial 2014-07-25 17-22-44

 

On the macroeconomic front, the German GfK consumer sentiment rose to 9.0 for August, beating analysts’ expectations of 8.9. However, the Ifo business climate survey showed lower expectations of the German economic after reporting a figure of 103.4 in July against estimates of 104.5. Current market conditions were also below expectations, at 112.9 for the same period. The euro extended losses against the dollar, trading near 1.342.

EURUSD

EURUSD Curncy (EUR-USD X-RATE)   2014-07-25 17-23-35

In the UK, the GDP release showed the UK economy grew by 0.8% in the Q2 2014, in line with expectations, verifying a 3.1% y/y growth. Sterling was under some pressure trading around 1.697. 

In London, heavy losses in energy and healthcare stocks offset gains across financial stocks and banks. RBS reported solid earnings results and climbed higher by 10.77% today, while Barclays, Lloyds and HSBC also followed the uptrend in the banking sector. 

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