USA continues to disappoint investors

Data and earnings alike conspired together to ensure the US markets had a dismal day of trading.

Procter & Gamble, DuPont and Caterpillar all missed targets today to continue this poor US earnings season, with many arguing the stronger dollar has harmed overseas business. This misery was joined by worse than expected durable orders figures; the best consumer confidence figure since August 2007 was a rare bright spot on an otherwise gloomy day for the US.

Ahead of an important FOMC statement tomorrow, today has further dented the argument for the Fed raising US interest rates this year. There are now rumours of a rate hike in March 2016, a far cry from the earlier date some were clamouring for at the end of 2014.

In Europe, Syriza is already delivering on some of its promises by streamlining the Greek government to a 10-minister cabinet. Provocative finance and foreign minister appointments showed that, for now, Syriza are not going to back down from the radical reforms the party want to see in Greece, even if this sets them on a collision course with the ECB, the IMF and the European Commission. With Moodys stating the Greek election result is credit negative as it prolongs risk, that term looks like it will define Europe’s 2015 as the string of uncertain European elections continues with a testy presidential race in Italy on Thursday, and a UK general election only 100 days away yet no clearer in its outcome.

The bearish tone that was expected yesterday made its entrance as the day progressed, as the DAX looks likely to shed most of the gains it made on Monday. As the DAX retraced its steps away from its resistance level, the stream of volatility inducing appointments leaking out of Greece caused the Eurozone indices to haemorrhage points as Tuesday continued.

Whilst the FTSE’s day was not as disastrous as its US and Eurozone peers, it still spent the afternoon at a loss as it struggled to overcome the Afren saga and GDP disappointments of this morning. With Afren now approaching a share prices decline of 60%, this continued to have a knock on effect for the energy-sector as a whole, despite Brent Crude’s recovery of its $48 per barrel level. With little in the way of significant data for the rest of the week, the FTSE will have to look elsewhere if it wants to reverse this retreat.