Stock markets are lower again in early trading as economic data continues to disappoint, dragging on the price of oil and broader sentiment.

A much bigger than expected slowdown in construction activity during April and poorly-received earnings from Royal Dutch Shell and Sainsbury’s are pressuring the FTSE 100. Mining stocks continue to lead declines amid falling commodities and weaker economic data from China.

Stock markets have been falling in the past few days amid mixed corporate earnings but yesterday’s sharp reversal higher in the US dollar, if sustained could add to downside risks. Yesterday’s dollar strength is lagging the weakness in oil and commodity currencies which topped out last week.

The biggest risk to the current rally in equities is that oil and other commodity markets rollover and pull outperforming resource sectors down with them. Oil prices are weaker for fourth day on Wednesday but downside momentum appears to be slowing.

Services in the Eurozone slipped slightly in April according to thel attest PMI data but nonetheless continue to be the main driver of economic growth amid weakness in manufacturing. The British pound added to yesterday’s sharp drop after the UK construction PMI for April fell from 54.2 to 52.0 when expectations were for a more modest drop to 54.1

Shares of Royal Dutch Shell have fallen after it reported another huge quarterly decline in profits including a $1.4bn loss in its exploration and production business. Adjusted net income was ahead of expectations thanks to a bigger return in refining and trading as well as effective cost-cutting. Shell’s biggest risk is also its biggest opportunity; a dividend yield of 7% thanks to its higher debt burden following the BG merger.

US stocks look set for a lower open ahead of private payrolls and ISM non-manufacturing data and more Q1 earnings results. Weakness in the tech sector continues to weigh on the Nasdaq, despite Apple snapping an eight-day losing streak.

Notable earnings before the US open: Priceline, Time Warner

Notable earnings after the close: Kraft, Tesla, 21st Century Fox, Prudential


USA pre-opening levels

S&P 500: 14 points lower at 2,049

Dow Jones: 95 points lower at 17,655

Nasdaq 100: 30 points lower at 4,311


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