- Markets fall on Tuesday, snapping a two-session bull run.
- Europe data, Snap warning, among the main factors.
- The pound suffers a sharp drop, cryptos continue to sideline.
Markets closed positive on Monday, but are broadly falling on Tuesday, with Wall Street futures down as much as 1.50%. Poor economic data from Europe contributed to concerns about the outlook. In Europe, the main stock markets fell 0.65% on average.
Is recovery over?
After rising for two days, the futures of the main Wall Street indices point to a negative opening. The Dow Jones falls 0.60% and the S&P 500 loses 1%. In Europe, the FTSE 100 lost 0.20% and the DAX 0.79%.
Nasdaq futures fall 1.50% affected by a drop of almost 30% of Snap (Snapchat and other social networks) after announcing that it will not meet the revenue and profit targets for the second quarter due to the deterioration of the macroeconomy. This dragged Facebook which falls 6.8%.
The government of China made new stimulus announcements to avoid a further slowdown in the pace of growth, but it did not have an impact on equity markets, which continue to look more at the restrictions imposed by the COVID in the Asian giant.
The market was affected by the S&P Global PMI data from Europe, where most showed data below expectations. The Eurozone integrated fell to 54.9, against the 55.3 expected, that of Germany was the exception, rising to 54.6, surpassing the consensus 54. In the UK, manufacturing fell to 54.6 and services fell from 58.9 to 51.8. The bad data generated a sharp drop in the pound in the foreign exchange market.
The dollar is trying to show signs of stabilization in the face of a fall in the stock markets. The dollar index trades at 102.00, down just 0.10% after pulling away from the low of 101.74 (lowest level since April 26). At the same time Treasury yields are down modestly, remaining in the range of recent days.
The euro marked new highs against the dollar above 1.07, continuing to be supported by statements from European Central Bank officials. in Davos, Christine Lagarde practically confirmed positive interest rates by the end of September.
The recovery of cryptocurrencies lost steam. The Bitcoin it returned below $30,000, although it remains in the recent range. Metals rise after Monday’s pullback. Gold is close to $1860 and silver is close to $22.00. Oil prices rise less than 0.50% after recovering from a previous drop.
The economic calendar shows the preliminary US S&P Global PMI for May on Tuesday, in addition to new home sales and the Richmond Fed index. The Chairman of the Federal Reserve, Jerome Powell, will speak at an event during the American session. On Wednesday it will be the turn of the Fed minutes.
On Tuesday, Toll Brothers, Intuit, Best Buy, Ralph Lauren and AutoZone, among other companies, will present results.
Technical levels
Source: Fx Street
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