As expected global stock indices struggled to hold on to near term support levels as jittery investors took profits after the recent rally. European benchmark indices got off to a tentative start before turning lower and extending yesterday’s declines as investors, spooked by weaker than expected manufacturing and industrial production in the UK, opted to sit on the side-lines ahead of the start to earnings season.
With Alcoa due to hold its Q2 earnings conference call after European markets close investors in London’s blue chip index, France’s CAC and Germany’s DAX decided to take recent gains off the table ahead of any uncertainty surround corporate earnings. At the time of writing, Wall Street indices were trailing between 0.4-0.6% lower, set to extend a second day of weak performance as investors adopt a wait-and-see approach.
The dollar index pared gains for a second session today as intraday moves struggle to breach tentative resistance at the 200 day MA towards 80.260, dropping back down towards the 50 day MA around 80.170. Spot gold prices slipped towards$1,315/oz today, after attempting to test resistance towards $1,325/oz earlier on. Investors are hopeful that positive corporate earnings will bolster the US economic outlook.