Finally today saw some important data releases it what has so far been a relatively quiet week. Investors have struggled over the past few sessions to justify the global stock market gains made throughout December and at the start of the month, resulting in many opting to sit on the side-lines. As QE is wound down, uncertainty surrounding Fed action has dissipated which has prompted investors to switch focus back to economic data and corporate earnings, which today have struggled to support major equity indices.
The bearish earnings reports from McDonald's, Nokia and Lockheed Martin have acted as a dampener on further gains in equity markets, prompting a sell off on Wall Street and a reversal in European equity markets after a brief foray into positive territory during early morning trade. London’s blue chip index struggled to hold on to tentative support around 6,800 as is closed lower for the third consecutive session, losing 0.78%. At the time of writing Wall Street was trailing significantly lower as industrials and financials faced considerable selling pressure with the S&P 500 down 0.9% and the DJIA trailing 1% lower.
Wider European markets also struggled as investors reacted to lacklustre initial jobless claims, rising 1,000 from the previous week, as well as surprise fall in Chinese flash manufacturing PMI which dropped below 50 for the first time since July last year. France’s CAC shed 1.05% throughout the session while Germany’s DAX closed 0.92% lower. Gold prices snapped a two day losing streak on the weaker than expected Chinese data, trading as high as $1,265/oz today as levels built on support offered by the 50 day MA towards $1,235.