US markets softer in response to continued global headwinds

<p>US markets closed marginally weaker on Monday as continued concerns about interest rates, a possible Greek exit from the eurozone and negative Chinese data impacted investor sentiment.</p>

US markets closed marginally weaker on Monday (February 9th) as continued concerns about interest rates, a possible Greek exit from the eurozone and negative Chinese data impacted investor sentiment. The Dow Jones Industrial Average lost 95.08 points to close at 17,72921, the S&P 500 Index dropped 8.73 points to 2,046.74, while the Nasdaq lost 18.39 points to close at 4,726.01.

Brent crude remained below US$58 (£38) a barrel on Tuesday as the International Energy Agency confirmed the US will remain the world's top source of oil supply growth until 2020, only pausing amidst the current price issues before regaining momentum, reported Reuters. This defied earlier expectations of a more dramatic slowdown in shale output following OPEC’s report, which forecast a drop in US supply.

Economic news

On the back of weak Chinese trade data released on Sunday, there was further bearish news on Monday with the release of China's consumer inflation data, which showed the slowest rate increase since November 2009 The CPI climbed 0.8 per cent from last year, below a Reuters consensus of a one per cent gain and down from the 1.5 per cent rise in December, CNBC reported. This sparked further concerns about weakening domestic demand and fuelled expectations of further easing measures.

The US dollar was trading slightly higher on the likelihood of an interest rate hike with USD/GBP at $1.5225 as at 13.00 GMT.

Company news

Coca Cola reported mixed fourth quarter earnings with positive market share data while net income attributable to shareholders was down 55 per cent in the quarter to US$770 million (£506 million), largely as a result of currency fluctuations. Net revenues were down two per cent in the quarter; excluding the impact of structural items, while comparable currency neutral net revenues grew four per cent according to a company statement.

The world’s largest smartphone chipmaker Qualcomm has agreed to pay a $975 million fine to settle an anti-monopoly case in China. The Wall Street Journal reported that shares in the company rose in after-market trading in the US, as investors reacted positively to the news that Qualcomm’s business model would remain largely intact.

In a surprise move Netflix announced on Monday that it would offer its streaming service in Cuba. However, with subscription charges likely to represent more than two thirds of the average monthly wage, most Cubans would be priced out according to CNBC. Shares were flat in the stock following the announcement and closed down 0.29 per cent.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.