Europe
A second day of declines on the Athens Stock Exchange and corporate earnings disappointments from Bay.Motoren Werke AG ST (XETRA:BMWG) and Credit Agricole (PARIS:CAGR) weighed on major European bourses. When stocks were first liquidated in Athens, a lot of the funds would have migrated into the rest of Europe. By the second day, concern over another day of declines in Greece hit wider confidence in the region.
The rate of decline in the Greek market was drastically reduced to -1.2% when compared to the 16% hammering it took on Monday. More than half of Greek shares were actually higher but the extent of declines for the banks dragged on the overall stock exchange index lower.
BMW was the latest European car manufacturer to guide lower on its future revenues citing the slowdown in China.
A bounce back in the resource sector helped lift the FTSE 100 as commodity prices rebounded on Tuesday but Shire’s latest bid for Baxalta and disappointing results from Travis Perkins (LONDON:TPK) and Standard Life (LONDON:SL) were a hindrance, leaving the index only slightly higher on Tuesday.
US
Another slump in the shares of Apple Inc (NASDAQ:AAPL), which has the largest weighting in major stock benchmarks left US markets little changed at the market open on Tuesday.
Apple closed at six-month lows and beneath its 200-day moving average on Monday after a report indicated the tech giant had lost its top place in China during the second quarter with domestic rivals Xiaomi and Huawei moving ahead in the rankings. It was also revealed Apple has just bought a 43 acre plot near San Jose airport. Companies will often engage in large real estate projects when confidence is at its peak and can foretell a period of slower growth.
Confidence has been ebbing out of Apple shares (NASDAQ:AAPL) since its last earnings report when the tech giant guided lower for the second half of the year and neglected to single out Apple Watch sales. There is still a lot of long term growth potential for Apple though the likes of Apple Music and a reported move into the auto industry but momentum has turned negative in the short term. A 50% retracement of the rally since April 2014 would take shares back to $104.
Factory orders increased by 1.8% as expected in June
FX
It was a quiet day for most major currencies with the British pound dipping slightly after a weaker than expected construction PMI while the big exception was the Australian dollar which soared after the latest Reserve Bank of Australia policy meeting.
The RBA chose to leave a key sentence out of its statement referring to the Australian dollar being overvalued sending AUD/USD up over 1.5% and back over 0.74 for the first time in over a week.
GBP/USD has failed on several attempts to break above 1.57, as markets await a triple whammy from the Bank of Englandon Thursday when it reports its rate decision, minutes and the inflation report.
Commodities
Oil markets saw some reprieve from the onslaught on Tuesday as key levels in the Brent and WTI contract kept sellers at bay. Brent dipped below $50 per barrel and WTI fell below $45 on Monday so both saw gains of as much as 1% ahead of API inventory data.
There was a general rebound in metals markets alongside Chinese equities ahead of service sector data released on Wednesday.
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