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Stocks are getting to hit across the board on Tuesday due to apprehension ahead of the US CPI report and weaker than expected earnings from the US.
After racking up solid gains on Monday the EURO Stoxx 600 is down by -0.6%, while the German DAX is down by -1.0%. For the record, Germany will release its CPI report this week.
More pain in Europe as the French CAC finished down by -0.5%, while the Italy MIB closed -1.0%. In terms outperformance Spain’s IBEX gained +1.0%, while the FTSE100 eked out a 0.1% gain.
In the United States the Nasdaq is the biggest loser, following news that Micron issued a revenue warning. Micron is seen as a bellwether company the tech sector.
Subsequently, the bears revenue news from Micron dragged down chip related stocks as Micron is a massive player in the laptop and electronics space.
Salesforce was another company that released weaker results. Salesforce was the biggest losing stock on the Dow Jones Industrial Average. Nike and Home Depot also weighed on the DJIA.
It should also be noted that US Productivity and Labour Cost data was released today, and the outcome of the release further increased the notion of more aggressive Fed action.
The euro currency was one of the strongest currencies against the US dollar today as the pair started to become comfortable above the 1.0200 level.
Worryingly, the British pound took a hit after a report circulated that the UK has drawn up plans for potential power cuts to homes and industries in January.
The report stated it’s the ‘worst case scenario’ that officials are planning for. Naturally, the news sent the GBPUSD pair reeling under the 1.2100 level and the EURGBP pair higher.
Gold is having a strong session and is knocking on the door of $1,800. Notably, the yellow metal has been outperforming silver prices today as silver bugs book some profit.
The yellow metal has an interesting technical set-up. If gold starts to firm above the $1,800 level then we could see a rally towards the $1,840 resistance area.
