Several days of gains for US and European stock markets came to an end Tuesday, with major indices falling about 1% on average. Reaction to earnings reports may get some of the blame but really, it just feels like a normal correction with the big relief rally of the last few days having now run its course. The NASDAQ had been leading the charge higher, breaking out to new all-time highs while the S&P stalled out near its previous peak. After the close today, both Apple and Microsoft beat the street on earnings, but will this be enough to help the index to shrug off overbought conditions? While July has historically tended to be a positive month for stocks on average over the last 25 years, we’re starting to head into the historically weakest time of year running into mid-October. Apple has been trading lower in the aftermarket even though it beat the street on earnings with soft iPhone sales and guidance apparently getting tagged as the culprit. If quarterly earnings and all the positive macro news of the last ten days aren’t enough to keep the party going, stock markets could be getting really vulnerable here. There are three factors that keep trading choppy over the next several weeks: First, we may see more profit-taking against earnings reports, particularly if there are disappointments on results or guidance. Second, the Fed appears to be back on track toward interest rate liftoff in September with the possibility for 1-2 increases this year. While a short-term concern this remains a long-term positive as rising interest rates go hand in hand with a stronger economy. Third, Grexit concerns could come roaring right back any time with European leaders hoping to wrap up a third bailout deal by early August (good luck with that after the gut wrencher of the last few weeks). Today’s currency trading has seen USD also go into correction mode, retrenching from several days of strong gains. NOK and EUR led the rebound, while AUD and NZD also posted significant bounces. NZD pairs could be particularly active over the next 24 hours up to and through tomorrow’s RBNZ meeting where another 0.25% interest rate cut is widely expected. Considering that the central banks of other resource producers have been cutting rates like the Bank of Canada last week and with the RBNZ having lots of scope to cut after 4 hikes last year, another cut still appears likely. Traders may still watch the statement though to see if the central bank continues to try talking NZD down or not. Corporate News Apple $1.85 vs street $1.81, sales $49.6B vs street $49.2B Microsoft $0.62 vs street $0.56 Yahoo! $0.16 vs street $0.18, guides next Q ex TAC revenues to $1.00-$1.04B below street $1.07B Chipotle Mexican Grill $4.45 vs street $4.43, same store sales 4.3% below street 5.7% Economic News Significant announcements released overnight include: Hungary interest rate 0.15% cut to 1.35%, a 0.10% cut had been expected S&P upgraded Greece to CCC+ from CCC- citing the risk of a Eurozone exit by 2018 falling to below 50% API crude oil inventories 2.3 mmbbls vs street 1.1 mmbbls Upcoming significant announcements include: 10:30 am AEST Australia leading index previous (0.1%) 11:30 am AEST Australia Q2 consumer prices street 1.7% vs previous 1.3% 9:30 am BST UK Bank of England minutes 9:00 am BST Italy industrial orders street 5.5% 10:00 am BST Italy retail sales street 0.2% 9:00 am EDT US FHFA house prices street 0.4% 10:00 am EDT US existing home sales street 5.40M 10:30 am EDT US DOE crude oil inventories street (2.0 mmbbls) 9:00 am NZST Thu NZ RBNZ interest rate 0.25% cut to 3.00% widely expected CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.