On Tuesday, US equity indices closed the session in negative territory, amid corporate profits data, which turned out to be weaker than market expectations as well as continuing geopolitical tensions. Tensions between the US and North Korea remain high, both countries continue to exchange threats that create nervousness around the world.
Yesterday, Goldman Sachs reported a lower than expected quarterly profit due to a drop in revenue from trading operations. The bank's shares lost -4.7% in the course of trading.
Shares of Johnson & Johnson lost approximately 3%, after the publication of the report, which showed the worst result in quarterly revenue for the last 14 months.
Bank of America and UnitedHealth Group Inc published reports on profits better than market expectations. However, Bank of America fell amid overall financial sector losses, while UnitedHealth shares rose.
The recent weak economic data in the US, including the March report on jobs, put pressure on the markets. Industrial production in the US grew by 0.5% in March compared to the previous month, while manufacturing output in the US in March fell by -0.4% compared to the previous month.
The volume of construction of new homes in the US in March fell by -6.8% compared to the previous month, which is lower than the forecasts of analysts.
Today, European stock indices manage to remain in the green, after the publication of important data on European inflation. On the contrary, the UK stock market is trading in the red, demonstrating its dependence on the market of the British currency. The British pound has sharply gained after the message on possible carrying out of pre-term elections in the Great Britain that increases political risks and has negatively reflected on stock of British market.
On Tuesday, British Prime Minister Teresa May said that she wants to hold general early parliamentary elections on June 8, and not wait until 2020 as planned. This step is seen by political analysts as May's attempt to strengthen his position during the Brexit talks with EU officials. Already today, voting in the British Parliament is expected on the issue of holding early elections, which is expected to receive the necessary support of two-thirds of the deputies.
Brent crude oil slightly gained, as price returned to the psychological level of $ 55 per barrel, waiting for the publication of official data on oil reserves in the US. Yesterday's data from the American Petroleum Institute (API) showed that last week crude oil inventories lost -0.840 million barrels, with a forecast of a decline of -0.050 million barrels. Today, in the focus there are US Department of Energy oil data. On Friday, a meeting of OPEC representatives will take place. Against this background, we can expect the return of market back to the level of 56.40-57 dollars per barrel.
In the FOREX currency market, the situation is stable, most market participants do not want to risk waiting for the publication of the Fed's Beige Book, as well as the speeches of ECB member Prat and FOMC representative Rosengren. Published data on inflation in the euro area justified the expectations of traders, but did not have a significant impact on the currency market. The European currency has found some support in the region of 1.0710. The dollar index fell yesterday below the psychological level of 100 points.
Global market sentiment continued to deteriorate on Tuesday. This time, another negative factor again came from political field . Now with the upcoming elections in France and the uncertainty surrounding the DPRK, the early voting in the UK has been added.
Most likely, this story will affect the British currency and create further growth in demand for risk-free assets. Largest bank profit data are also disappointing - the only driver of the last days from which one could expect the arrival of good news. Today, the traders will focus on beige book, corporate reporting data and official data on oil reserves.
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