Stock markets traded lower after disappointing earnings reports dragged Wall Street down, most notably by Apple (NASDAQ:AAPL). European shares have also posted declines while Asia follows. The Nasdaq tumbled 0.12% yesterday, after regaining losses from earlier in the session. The index suffered due to a massive 8.8% drop in Apple’s share price, while Microsoft (NASDAQ:MSFT) shares declined nearly 4%. These declines were led by disappointing earnings reports. Apple has shipped fewer iPhones than previously expected, causing some concerns that the tech giant has lost its touch. The Standard and Poor’s 500 index also declined, falling 0.4% to trade at 2119.21, and the Dow Jones Industrial Average fell 1% to trade at 17919.29.
European shares have underperformed yesterday. While the Greek crisis seems to be moving towards resolution, there are still notable obstacles on the way. Greek Prime Minister Alexis Tsipras will face his second major vote in parliament today, as reforms required by the upcoming bailout program will be voted on. The first round of tax hikes and budget reforms triggered a rebellion in his own party last week, and passed only thanks to support from opposing parties. The UK’s FTSE declined 0.1%, as major construction shares Barratt Developments (LONDON:BDEV) and Persimmon (LONDON:PSN) fall 1%. The French CAC fell 0.1% as well, as financial shares BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) fall 0.3%. The German DAX fell 0.4%, as pharmaceutical operation Bayer and Merck (NYSE:MRK) decline 1% each.
The euro lost some ground to the U.S dollar, nearing the $1.0808 three-month low seen on Monday. Currently, the EUR/USD is trading 1.0941. The dollar index traded steady at 97.331, after climbing to a two-month high of 98.151 on the previous day. The U.S. dollar is likely facing an interest rate hike this year, causing many to focus on monetary policy disparities between the U.S. and Europe. The U.S. is preparing toward a tightening of their monetary policy, with increase borrowing costs and higher-valued currency. At the same time, the European Central Bank is still employing a quantitative easing program focused on expansion. This leads most analysts to predict that the dollar is expected to strengthen against the euro independently from issues concerning Greece.
U.S. existing home sales data will be released later today. Canadian and UK retail sales reports will be released tomorrow, followed by crude oil stockpile reports, which can possibly impact declining oil prices. Eurozone manufacturing PMI data will be released on Friday, followed by U.S manufacturing and new home sales.