US retail sales disappoints whilst Greece drags down Eurozone

It was familiar scenes in the USA, as its latest round of economic data disappointed.

Missed retail sales targets led to a lifeless US open as the Dow Jones et al. saw marginal losses after the bell. One minor boost for dovish investors was the damage these figures did to the dollar. After spending the morning running the pound ragged the disappointments in retail, one of the Fed’s key areas of focus, led sterling to a big bounce against the greenback, with even more pronounced gains for the euro-dollar.

Elsewhere, US earnings season got underway this afternoon, and the big news was in the banking sector. JPMorgan Chase beat expectations due to improved revenue in its fixed-income trading sector leading its overall profits to a 12% increase with a year-on-year jump in EPS to $1.45 from $1.28; following this news JPMorgan managed to post around 2% in gains after the bell. Wells Fargo similarly beat profit estimates, but investors were more concerned with the bank’s fall in earnings per share, from $1.05 to $1.04 year on year; this slide in EPS hurt Wells Fargo at the open, as the stock fell around 1.5%.

Whilst the pound regained ground against the dollar, the FTSE continued to post some marginal, if near-record high, growth as Tuesday continued. Its positive glow was largely due to the healthy gains seen by its oil and mining stocks, with the latter especially rebounding after yesterday’s Chinese-export-fall-inspired losses. However, whilst stocks like Vedanta and Rio Tinto posted strong growth, copper couldn’t join in with the fun; reports of a slowdown in Chile, the world’s biggest copper producer, saw the metal fall to $2.68 per pound, its lowest price in around a month. Tomorrow morning is likely to bring more instability with Chinese GDP and industrial production data set to further impact the price of copper.

The Eurozone couldn’t shake the stink of a potential Greek default and subsequent Grexit this afternoon. Despite the IMF’s Blanchard claiming that the region could (just about) deal with the costly departure of Greece, alongside an upward growth revision by the IMF for the Eurozone, from 1.2% to 1.5% for 2015, the DAX saw three digit declines as the day went on, with the rest of the region’s indices following suit. Investors will be looking for some soothing words from ECB President Draghi tomorrow afternoon to ease the losses that have been felt at the start of this week.