Amazon Shares Surge

On Thursday, the shares of Amazon.com Inc. surged more than 13 %. This came after the e-commerce giant posted fourth-quarter earnings of 45 cents a share which topped expectations of only 18 cents a share. Shares of Amazon.com Inc. (NASDAQ:AMZN) traded at $353.01 a share after the company reported fiscal fourth-quarter net income of $214 million, or 45 cents a share. This was down compared with earnings of $239 million, or 51 cents a year earlier. On the upside was Amazon’s revenue which rose 15% from a year earlier to $29.33 billion. Despite the increase, the number was below analysts’ forecasts of $29.67 billion. Sales rose to $29.33 billion, up 18% after adjusting for the impact of currency exchange rates while Amazon had projected sales of between $27.3 billion to $30.3 billion. Also, the company’s operating expenses rose to $28.7 billion from $25.1 billion. Over the past 12 months, Amazon stocks have fallen 19 percent.

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U.S. Stocks Gain As Oil Rebounds    

On Thursday, U.S. stocks ended higher. This came in response to rebounding oil prices as well as better than expected data out of the U.S. Earlier in the day, WTI oil futures fell sharply but the commodity rebounded to settle at around $44 a barrel. Meanwhile, the pending home sales index fell 3.7% during December. Despite this, the year-on-year gain was 11.7 percent which marked the highest since June 2013. In other economic news, the Labor Department reported that the number of people who applied for U.S. unemployment-insurance benefits dropped to 265,000, down 43,000, in the week that ended January 24. This marked the lowest tally in 14 years and was also the biggest decline since November 2012. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) increased 1.3%, or 225.48 points, to 17,416.85. The index was lifted with big gains in McDonald’s Corp and Boeing Co. Also on the upside was the tech-heavy Nasdaq Composite index (COMP) which ended the day up 1%, or 45.41 points, at 4,683.41. Following the upward trend was the S&P 500 index (SPX) which closed up 1%, or 19.10 points, at 2,021.26. All 10 main sectors on the index finished higher.

markets

Gold Posts Biggest Drop in Over a Year

On Thursday, gold posted its biggest daily percentage drop in 13 months. This came as jobless claims in the U.S. fell sharply while the commitment by the Federal Reserve to tightening monetary policy later in the year negatively impacted the precious metal. Gold for February delivery dropped 2.4 percent, or $31.30, to settle at $1,254.60 an ounce, while March silver futures also declined 7.3%, or $1.32, to $16.77 an ounce. According to government data, the number of U.S. workers making first-time claims for unemployment benefits fell to 265,000 in the week ended January 24. This was down from a revised 308,000 a week earlier. This decline was much larger than expected by economists and it took initial claims to the lowest level since 2000. Adding to gold’s decline was a recovery in U.S. stocks and the U.S. dollar (USD). In other commodity news, platinum for April delivery dropped 3.3%, or $41.20, to $1,217.30 an ounce, while high-grade copper for March delivery fell 3 cents, or 1.1%, to $2.45 a pound.

gold

In the Spotlight – Google Shares Fall on Disappointing Revenue

On Thursday, Google Inc. reported disappointing revenue growth in the holiday quarter. The Internet search giant cited strong currency headwinds as well as slowing growth in its maturing search-advertising business as the reasons for the poor earnings results. Over the past 3 months, the shares of Google have dropped 7 percent, falling 2.8 percent in after-hours trading on Thursday. This decline in recent months has been caused by slowing revenue growth in Google’s core search advertising business. While the Google Play Store and YouTube have been performing well, these two faster-growing businesses remain small compared with search. There has been a decrease in the amount that Google receives per ad click and while the number of clicks increases, the majority of clicks come from smartphones which is viewed as less valuable by advertisers. According to Google’s fourth quarter earnings reports, clicks on advertiser links next to Google’s search results increased 14% from a year earlier. Despite this increase, Google got paid 3% less per click from a year earlier. In terms of revenue, Google reported an increase to $18.1 billion from $15.7 billion. This was below analysts’’ expectation for $18.46 billion in revenue. Google also reported profit of $6.91 a share, or $4.76 billion, which was up from $4.95 a share, or $3.38 billion. Excluding stock-based compensation, discontinued operations and other items, per-share earnings rose from $6.70 to $6.88 which was lower than analysts’ expectations for earnings of $7.11 a share. In order to maintain growth, Google has been spending more and in the fourth quarter, operating expenses were $6.78 billion or 37% of revenue. This was up from $5.03 billion, or 32% of revenues, in the year-ago quarter. Google’s research-and-development expenses also rose to $2.81 billion, up 46 percent.

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On Friday, among the companies whose shares are expected to see active trade include Chevron Corp. and MasterCard Inc. According to analysts, Chevron (CVX, -0.68%) is projected to report fourth-quarter earnings of $1.64 a share while MasterCard (MA, +3.72%) is forecast to post fourth-quarter earnings of 67 cents a share.

NYMEX Crude Rebounds in Asia

On Thursday, in Asian trading, the prices of crude oil rebounded as investors noted demand prospects in the U.S. economy. Crude oil for delivery in March traded at $44.54 a barrel, up 0.20%, on the New York Mercantile Exchange. Meanwhile, overnight WTI oil futures remained under pressure despite the fact that the U.S. Federal Reserve said in its meeting on Wednesday that the U.S. economy was expanding ‘at a solid pace’. The Fed also signaled that they would remain patient regarding interest rate hikes which are now expected in the second half of 2015. In its weekly report, the U.S. Energy Information Administration said that U.S. crude oil inventories rose by 8.9 million barrels in the week ended January 23. This was much higher than expectations for an increase of only 4.1 million barrels. Meanwhile, total U.S. crude oil inventories stood at 406.7 million barrels as of last week. This marked the highest level since August 1982. Elsewhere, Brent oil for March delivery dropped 47 cents, or 0.96%, to trade at $49.13 a barrel on the ICE Futures Exchange in London. On Tuesday, Brent for delivery in March advanced 2.99%, or $1.44, to close at $49.60.

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U.S. Stocks Lower After Fed Meeting        

On Wednesday, U.S. stocks ended the volatile trading session sharply lower. This came after the U.S. Federal Reserve said that it would remain patient regarding raising interest rates while falling oil prices and disappointing earnings also pushed stocks lower. The Fed’s hawkish statement pushed Treasurys and the U.S. dollar (USD) higher as investors sought safe havens. At the close of U.S. trading, the Nasdaq Composite index (COMP) declined 0.9%, or 43.50 points, to 4,637.99, despite the big gain by Apple which was unable to keep the tech-heavy index in the green. The earnings reported by Apple were way above expectations as the tech giant reported an $18 billion profit in the latest quarter. This pushed Apple’s share price up by 5.7 percent. Also on the downside was the S&P 500 index (SPX) which closed down 1.4%, or 27.39 points, at 2,002.23. All 10 sectors of the SPX finished in the red and the energy sector fell 3.9%, as oil fell to lowest levels since March 2009. Following the downward trend was the Dow Jones Industrial Average (DJIA) which declined 1.1%, or 195.84 points, at 17,191.37. Twenty seven of the index’s 30 components ended lower and Boeing Co. was the top gainer, while Exxon Mobil Corp. and Microsoft were the poorest performers.

markets

Japanese Yen Down After Fed Statement

In early Asian trading on Thursday, the Japanese yen (JPY) weakened. This came after the U.S. Federal Reserve said overnight that the U.S. economy was expanding ‘at a solid pace’ and that it remained on track to raise interest rates later in 2015. The USD/JPY currency pair traded up 0.16% at 117.74. Meanwhile the Australian dollar (AUD) traded higher with AUD/USD at 0.7899, up 0.15%. In Japan, reports showed that December retail sales rose 0.2% year-on-year. This was down compared to an expected gain of 0.9 percent. Also, in Australia, the fourth quarter import price index rose 0.9%, while the export price index fell 1.0%. Analysts were expecting an increase of 1.5% in import prices and a flat level for export prices. Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.04% at 94.85.

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In the Spotlight – Facebook Beats Wall Street Revenue Target

On Wednesday, Facebook Inc. (FB, +0.61%) reported stronger-than-expected earnings and sales during the fourth quarter. This came as the company’s ad revenues and mobile usage increased. The Internet social network giant reported net income of 25 cents, or $701 million, which was up compared to 20 cents a share, or $523 million, a year-earlier. Revenue for the period was at $3.85 billion, up 49 percent year-over-year. This beat Wall Street expectation of $3.78 billion. Also, Facebook said it earned 54 cents excluding one-time items and this also beat expectations for 48 cents. On the upside were also the company’s mobile monthly active users during the quarter which reached 1.19 billion. This marked an increase of 26% over last year. Almost 69 percent of advertising revenue was mobile advertising revenue for the fourth quarter which was up from the 53% of total ad sales a year ago. The revenue for total advertising climbed 53% during the quarter to $3.59 billion. Despite beating Wall Street expectations, the shares of Facebook were little changed in after-hours trade.

Facebook Shares - 29 Jan 2015

On Thursday, among the companies whose shares are expected to see active trade include Google Inc., Amazon.com Inc., Ford Motor Co. and Alibaba Group Holding Ltd. Google (GOOGL, -1.68% GOOG, -1.66%) is projected to report fourth-quarter earnings of $7.12 a share, while (Amazon AMZN, -0.93%) is expected to post fourth-quarter earnings of 18 cents a share. Also, Ford (F, -1.63%) is expected to report fourth-quarter earnings of 22 cents a share while Alibaba (BABA, -4.36%) is forecast to post fiscal third-quarter earnings of 75 cents per American depository share.

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Biggest Drop In U.S. Stocks In 3-Weeks

On Tuesday, U.S. stocks recorded their biggest decline in three weeks. This drop came in response to poor earnings reports from Caterpillar Inc. and Microsoft Corp. as well as a drop in durable-goods orders. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) declined as much as 380 points, but closed down 1.7%, or 291.49 points, at 17,387.21. Also on the downside was the Nasdaq Composite index (COMP) which dropped 1.9%, or 90.27 points, at 4,681.50. This decline was prompted by its largest component, Apple Inc. which slid 3.5 percent. Following the downward trend was the S&P 500 index (SPX) which closed down 1.3%, or 27.53 points, at 2,029.56, as Microsoft Corp. and Caterpillar Inc. plunged to lead losses. In economic news, the Commerce Department in the U.S. reported that new home sales climbed by 11.6% to 481,000 units last month. This was above expectations for 450,000 units. Also, data released earlier in the day showed that total U.S. durable goods orders dropped 3.4% last month. This was down compared to expectations for a gain of 0.5%. Core durable goods orders, excluding volatile transportation items, declined in December by 0.8 percent. On the upside, the Conference Board said its index of U.S. consumer confidence improved to an eight-year high of 102.9 in January from a reading of 93.1 in December. Analysts expected the index to increase to 95.1 in January.

markets

Crude Oil Continues Downward Trend       

In Asian trading on Wednesday, crude oil prices dropped. This came in response to downbeat U.S. supply data which negatively weighed on investor sentiment. In its report on Tuesday, the American Petroleum Institute said that crude oil stocks surged 12.7 million barrels last week. Their data also showed that stocks of distillate fell 670,000 barrels while gasoline stocks declined by 5 million barrels. Investors have now turned their attention to the stock data by the U.S. Department of Energy expected later on Wednesday. On the New York Mercantile Exchange, crude oil for March delivery traded at $45.50 a barrel, down 0.51%. Meanwhile, overnight on Tuesday, West Texas Intermediate oil futures inched higher as investors digested a mixed bag of U.S. economic data. Crude oil for March delivery added 0.62% or 28 cents to trade at $45.43 a barrel on the NYMEX during U.S. morning hours. Prices held in a range between $44.82 and $45.69. Elsewhere, Brent oil for March delivery increased by 17 cents, or 0.34%, to trade at $48.33 a barrel on the ICE Futures Exchange in London.

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Mixed U.S. Data Keeps USD Lower

On Tuesday, the U.S. dollar (USD) extended losses against most major currencies. This came in response to the release of mixed U.S. economic reports while investors now turn their attention to the upcoming policy meeting of the Federal Reserve expected on Wednesday. In currency trading, the EUR/USD currency pair advanced 1.54% to trade at 1.1410. The euro hit an 11-year low against the greenback on Monday in the wake of a sweeping election victory for the anti-austerity Syriza party in Greece. The single currency was however able to stabilize as the currency’s steep losses prompted investors to take profits on bearish euro positions. Meanwhile, the British pound also traded higher against the U.S. dollar, with GBP/USD up 0.93% to 1.5213 while the USD/JPY was also down 0.90% to 117.40. Against the currencies in Canada, New Zealand and Australia, the USD traded lower with USD/CAD down 0.72% at 1.2384, NZD/USD up 0.67% to 0.7475 and AUD/USD up 0.47% to 0.7963. Also, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 1.26% at 94.10.

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In the Spotlight – Microsoft Slumps While Apple Shines

In pre-market trade on Tuesday, the shares of Microsoft Corp. (MSFT, -9.25%) dropped 7.9 percent. This came after the company reported a disappointing outlook which then prompted downgrades by analysts. J.P. Morgan downgraded Microsoft to neutral from overweight and also reduced its price target from $53 to $47. This downgrade came in response to Microsoft’s spending projections. Meanwhile, Sterne Agee also lowered its price target on the stock from $46 to $44.

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Meanwhile, Apple Inc. (AAPL, -3.50%) took center stage yesterday and reported that their quarterly profit rose 38% to a record high. This increase was sparked by a booming demand for the iPhone which saw record sales while quarterly earnings and revenue sailed past consensus estimates. The shares of the tech giant traded at $115.13 on heavy volume and then closed the regular trading session down 3.5 percent as part of broader market selloff. Apple posted net income of $18.0 billion for its fiscal first quarter ended December 27 which was up from $13.1 billion in the same period a year earlier. Also, the company’s revenue increased 30% from $57.6 billion to $74.6 billion while earnings per share rose 48% to $3.06 from a split-adjusted $2.07. The positive earnings were driven by record iPhone sales and Apple sold 74.5 million iPhones during the quarter. This marked an increase of 46% from a year ago and also beat analysts’ expectation for 66.5 million units. These iPhone sales provided cover for another sluggish quarter for the iPad. Apple said it sold 21.4 million iPads during the December period which was an 18% decline from a year earlier. Over the past year, Apple shares have increased by 40 percent mainly because of expectations of a strong upgrade cycle from the bigger phones.

On Wednesday, investors will be focused on the Federal Reserve’s policy meeting for further clarification on when interest rates might be increased.

U.S. Dollar Slips Against Most Major Currencies

On Monday, the U.S. dollar (USD) traded lower against most major currencies. This came in response to investor fears that were sparked by the winning anti-austerity Syriza party in Greece on Sunday which sent the euro (EUR) plunging against the greenback. Investors were concerned that the party would renegotiate the terms of Greece’s €240 billion international bailout and reverse many of the austerity measures imposed by the European Union and International Monetary Fund. Despite this, the euro then stabilized by Monday prompted by the European Central Bank last week Thursday when it unveiled a €1.2 trillion asset purchase program which aims to combat the inflation and slow growth in the euro area. In currency trading, the EUR/USD gained 0.49% to 1.1259. This came after the pair recovered from overnight lows of 1.1099, the weakest since September 2003. Meanwhile, the EUR also traded higher against the Japanese yen and the Swiss franc with EUR/JPY up 1.02% and trading at 133.34 while the EUR/CHF was up 2.66% and trading 1.0092. Meanwhile, the USD also traded higher against the yen with USD/JPY up 0.53% at 118.43 and USD/CHF was also up 1.89% to trade at 0.8964. Also, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.16% at 95.16.

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Small Gains for U.S. Stocks     

After a choppy trading session on Monday, U.S. stocks ended with small gains. While investors seemed to shrug off the results of the Greek election which saw the leftist Syriza party winning, a relative calm in global equity markets was attributed to the introduction of a quantitative easing program by the European Central Bank last week. At the close of U.S. trading, the Nasdaq Composite index (COMP) advanced 13.88 points, or 0.3%, at 4,771.76 while the S&P 500 index (SPX) added 5.24 points, or 0.3%, at 2,057.07. Also on the upside was the Dow Jones Industrial Average (DJIA) which added 6.1 points to 17,678.70. Elsewhere, Asian stocks rose on Tuesday with the benchmark regional index headed for a two-month high. In morning trade, the MSCI Asia Pacific Index added 0.6 percent. Meanwhile in Shanghai, the Shanghai Composite gained 0.36% and Australia’s S&P/ASX 200 Index rose 0.6%. In Seoul, the Kospi index gained 0.5% while in Hong Kong, the Hang Seng Index fluctuated near a four-month high. After the markets close on Tuesday, investors will look to earnings from Apple Inc. (NASDAQ:AAPL) in the U.S. which will set the tone in tech stocks for the quarter.

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Gold Prices Flat in Asian Trading

In Asian trading on Tuesday, gold prices traded mostly flat. This came in response to investor concerns about Greece’s exit from the euro zone while investors also look ahead to the Federal Reserve and U.S. data this week. On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at $1,281.90 a troy ounce, up 0.01 percent. Overnight on Monday, gold fell more than 1% as safe haven demand weakened as investor fears over the Greek election diminished. So far this year, gold is up almost 9 percent. In other commodity news, silver futures for March delivery rose 0.12% to trade at $17.930 a troy ounce on the Comex while copper for March fell 0.07% to trade at $2.541 a pound. For 2015, silver has gained nearly 15 percent.

gold-flat

In the Spotlight – Microsoft Fails to Impress, Shares Decline

In an extended trading session, the shares of Microsoft Corp. (MSFT, -0.36%) declined. This came after the software giant reported commercial sales for the second quarter which missed analysts’ expectation. Microsoft reported commercial licensing revenue of $10.68 billion which was down from analysts’ expectations of $10.94 billion. As a result, the shares dropped 2.6 percent to $45.77. Despite this shortcoming, the company’s fiscal second-quarter results were in line with analysts’ expectations and Microsoft reported earnings of $5.86 billion, or 71 cents a share, in the fiscal second quarter, down from 78 cents a share a year earlier. Meanwhile, revenues came in at $26.5 billion, compared with expectations of $26.3 billion and up from $24.5 billion a year earlier. According to the software giant, their recent financial results included the costs of integration and restructuring expenses at $243 million as well as the ongoing integration of the Nokia mobile business which Microsoft purchased in 2014.

Microsoft Share Price - 27 Jan 2015

Over the last few quarters, Microsoft’s bottom line has been negatively impacted by expenses related to job cuts which the company started last summer. The July plans included up to 18,000 jobs cuts, or about 14% of its workforce at the time, largely to clear up overlap with the Nokia businesses. Despite this, Microsoft shares have already gained 1.2 percent since the beginning of 2015. Through Monday’s close, the stock has risen nearly 28% over the past 12 months.

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Investors have now begun turning their attention to the Apple earnings report due out today as well as Wednesday’s Federal Reserve meeting for further clarification on when interest rates might start to rise.

U.S. Stocks Break 4-Day Winning Streak

On Friday, U.S. stocks broke a four-day winning streak, ending the trading session mostly lower. On the upside were European stocks which continued to rally on Friday after the European Central Bank (ECB) introduced quantitative easing on Thursday. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) lost 0.8%, or 141.38 points, to close near the session low at 17,672.60. Despite this decline, this index saw a gain of 0.9 percent on the week. Also on the downside was the S&P 500 index (SPX) which declined 0.6 percent, or 11.33 points, to end 2,051.82. On the week, the index saw a 1.6% advance which marked its strongest since the week ending on the 19th of December. The declines on the index were also limited by positive quarterly earnings reports released by E-Trade Financial Corp. and Starbucks Corp. Breaking the downward trend was the Nasdaq Composite index (COMP) which advanced for a fifth day to end 0.2%, or 7.48 points, higher at 4,757.88. On the week, this tech-heavy index rose 2.7 percent. Meanwhile, the CBOE Volatility Index (VIX) increased by 2% on Friday but fell more than 20% for the week.

World Market Data - 26 Jan 2015

Euro Drops After Greek National Elections

On Monday, the euro (EUR) dropped in early Asian trading. This came in response to the win by the anti-austerity Syriza party in Greece after the country’s snap national elections which took place on Sunday. In currency trading, the EUR/USD traded down 0.44% at 1.1155 while the USD/JPY traded down 0.11% on safe haven demand at 117.66. Also on the downside was the Australian dollar which traded down against the greenback with AUD/USD down 0.42% at 0.7875. After winning the elections on Sunday, the Syriza party pledged to force Greece’s creditors to renegotiate the terms of the country’s €240 billion euro financial bailout. Meanwhile, in Japan, the trade balance for December is due out today at 0850 local time. Analysts are expecting a deficit of ¥740 billion yen expected which is less than the November deficit of ¥829 billion. The Bank of Japan (BoJ) will also publish the minutes of its latest policy meeting which will contain their insights regarding economic conditions in the country. Also, The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 51% to 95.81.

Greek Elections - 26 Jan 2015

Gold Prices Rise With New Policies Expected from Greece

On Monday, in Asian trading, gold prices gained. This boost in the price of the precious yellow metal came after the anti-austerity Syriza party in Greece took a victory and looked set to implement new policies that could sour relations with the country’s creditors. Gold futures for February delivery rose 0.12% to settle at $1,295.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Last week on Friday, gold edged lower in response to a broadly stronger U.S. dollar (USD) which then prompted investors to book profits from a recent rally which took prices to the highest level in more than five months. Meanwhile, the euro (EUR) fell to fresh 11-year lows against the greenback after the European Central Bank unveiled a €1.2 trillion asset purchase program on Thursday. In other commodity news, also on the Comex, silver futures for March delivery rose 0.22% to at $18.348 a troy ounce on Monday while copper for March delivery tumbled 1.26% at $2.4661 a pound.

Gold Prices Rise - 26 Jan 2015

In the Spotlight – Apple to Report Earnings This Week – Can They Beat Their Record?

On Tuesday, the 27th of January, Apple Inc. (NASDAQ: AAPL) will report first quarter 2015 earnings. Analysts predict that record iPhone sales will enable this tech giant to report both record earnings per share as well as record revenue. The current consensus estimate for Apple’s revenue for Q1 is $67.3 billion while EPS is estimated at $2.59. This would mean a 17 percent increase in revenue from a year ago while EPS would be up 25% from a year-ago if estimates are met. At the core of Apple’s bullish report expectations are iPhone sales and according to analysts, we can expect to see sales in Q1 of 66.5 million which will be up 30% from the year-ago quarter if met. Meanwhile, analysts at Morgan Stanley have stated that they expect iPhone sales to be as high as 67 to 69 million which is way above their initial expectations for 62 million in sales.

Apple Shares - 26 Jan 2015

The reason so much focus is being placed by analysts on Apple’s iPhone sales is that this segment is the company’s most profitable, accounting for 56 percent of revenue in Q4 2014. If Apple meets market expectations for Q1, this will push this revenue to 63 percent of Apple’s total revenue for the quarter. Meanwhile, in Q4, Mac and iPad accounted for 15.7% and 12.6% of Apple’s revenue, respectively. Analysts have speculated that due to the release of iPhone 6 and iPhone 6 plus with larger displays, demand for these smartphones has increased. Adding to this was the company ensured that there was availability and there were minimal online wait times for iPhone shipments during the first quarter. Apple will release first-quarter results on Tuesday and this will then be followed by conference call hosted by Apple to discuss the results, followed by a question and answer session with analysts, at 5 p.m. ET on the same day. Apple is currently trading at $112.98 per share.

Apple Earnings - 26 Jan 2015

In the week ahead, the Ifo research group in Germany is to publish its report on business climate on Monday while the U.K. is to release private sector data on mortgage approvals. Meanwhile, Wednesday’s Federal Reserve monetary policy statement will be closely watched, while New Zealand’s central bank is also to hold a policy meeting. Also, investors will also be focusing on Friday’s preliminary data on fourth quarter growth, while the latest euro zone inflation data is also due out on Friday.

Jobless Claims Above 300,000 for 3rd Straight Week

According to data released by the Labor Department on Thursday, the number of people who sought new unemployment benefits in mid-January in the U.S. fell by 10,000. Despite this decline, the level of applicants remained above 300,000 for the third straight week. This is the first time this has occurred since July 2014 and analysts are viewing this as a reflection of post-holiday layoffs. Data showed that initial jobless claims declined from a revised 317,000 to 307,000 in the seven days ending on the 10th of January. Also, initial claims from two weeks ago were revised up by 1,000 to 317,000, putting them at the highest level in seven months.Meanwhile, other labor-market reports have shown that companies are still adding jobs at a steady pace. In December, the U.S. added 252,000 jobs to finish the strongest year of job creation since 1999. Analysts have forecast that 2015 may be another year of rapid job growth.

Initial Jobless Claims

U.S. Stocks Rally To Best Gains

On Thursday, U.S. stocks recorded their best gains in two weeks. This came in response to increased oil prices as well as the move by the European Central Bank to initiate a bond-buying program which is intended to revive the deflating eurozone economy. At their meeting yesterday, the central bank stated that they would launch a bond-purchase program worth $69 billion, or 60 billion euros, a month in March which will then continue until September 2016 at least. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) advanced 259.70 points, or 1.5%, to 17,813.98 while the S&P 500 index (SPX) jumped 31.03 points, or 1.5%, higher at 2,063.15. This benchmark index broker through its 50-day moving average and has now turned positive for the year. Also on the upside was the Nasdaq Composite index (COMP) which ended the day up 82.98 points, or 1.8%, at 4,750.40.

Indices U.S. - 23 Jan 2015

Oil Prices Surge On Saudi King’s Death

On Friday, crude oil prices took a turn and surged in Asian trading. This came after the death of Saudi Arabia’s King Abdullah. His death has now sparked questions regarding this key U.S. ally and if the succession plan will maintain close bonds particularly regarding diplomacy and oil policies. Another boost for oil came after the closely-watched survey of China’s manufacturing sector indicated continued contraction. According to data, the HSBC January initial estimate came in at 49.8, compared to December’s final of 49.6. Despite this, the January flash output index ticked up to 50.1 from 49.9 in December. This placed the index in expansion territory above 50. On the New York Mercantile Exchange, crude oil for February delivery jumped 1.88% to trade at $47.18 a barrel. This was down more than 2% from earlier gains. Meanwhile overnight on Thursday, West Texas Intermediate oil futures added to losses. This came after data showed that oil supplies in the U.S. rose more than expected last week which prompted investor fears regarding a supply glut. According to the weekly report of the Energy Information Administration in the U.S., crude oil inventories rose by 10.1 million barrels in the week ended January 16. This was way above expectations for an increase of 2.7 million barrels. Also, total U.S. crude oil inventories stood at 397.9 million barrels as of last week. Elsewhere on Thursday, on the ICE Futures Exchange in London, Brent oil for March delivery shed 66 cents, or 1.34%, to trade at $48.38 a barrel.

Saudi King Dies

In the Spotlight – Earnings of GE & McDonald’s in Focus While Starbucks Impresses

On Friday, among the companies whose shares are expected to see active trade, include McDonald’s Corp. (MCD, +0.61%) as well as General Electric Co. (GE, +1.00%). According to analysts, McDonald’s is forecast to post fourth-quarter earnings of $1.22 a share while General Electric is projected to report fourth-quarter earnings of 55 cents a share. Meanwhile, the shares of Starbucks Corp. surged after the coffee-making giant reported stronger sales and traffic at its cafes in the United States for the holiday quarter. In afterhours trading, the shares of Starbucks increased 3.7 percent to trade at $85.88 a share. During the holiday period, Starbucks took some steps to attract more U.S. customers such as offering a chance to win free Starbucks coffee drinks for 30 years to customers who used gift cards. As a result, customer traffic in the last quarter was boosted and sales at U.S. stores open at least 13 months rose 5% during the latest quarter while traffic grew by 2 percent. Also, the average ticket size also increased by 3 percent while the amount of US dollars loaded onto Starbucks cards jumped to $1.6 billion, up 17 percent.

Starbucks - 23 Jan 2015

Starbucks also announced that director Kevin Johnson would become the new CEO and president of the company from the 1st of March this year. This comes after the existing CEO, Troy Alstead, will take time off to spend with his family. In their earnings report, the world’s largest coffee chain reported revenue of $4.8 billion, up 13%, which matched analyst expectations. Starbucks also posted quarterly net income of $983.1 million, or $1.30 per share, up from $540.7 million, or 71 cents per share, in the year-earlier quarter. F0r 2015, Starbucks forecast fiscal revenue growth of 16% to 18% and full-year earnings, excluding items, of $3.13 per share from $3.09 per share.

Starbucks - 23 Jan 2015 -

USD/CAD Hits Six-Year High

On Wednesday, the Bank of Canada (BoC) made a surprise move and cut rates by 25 basis points in response to declining oil prices. As a result, the Canadian dollar (CAD) declined to six-year lows against the U.S. dollar (USD). After the announcement, the USD/CAD currency pair traded at highs of 1.2275 which marked the highest rate since April 2009. The pair subsequently traded up 1.39 percent at 1.2286. The Bank of Canada lowered its overnight target rate from 1.0% to 0.75% while expectations were for no change. The bank explained that due to falling oil prices, growth and underlying inflation in Canada will be negatively impacted. The central bank also stated that they expect economic growth to slow to about 1.5% and the output gap to widen in the first half of 2015. During the current year, inflation is also expected to fall below the bank’s target before increasing in 2016. The Canadian dollar also traded lower against the euro and the yen, with EUR/CAD up 2.27% at 1.4305 and CAD/JPY falling 2.52% to 95.62. Meanwhile, in other currency news, the EUR/USD was up 0.27% to 1.1585 while the USD/JPY dropped 0.93% to 117.72. This decline came after the Bank of Japan maintained the size of its stimulus program and reiterated its pledge to increase base money at an annual pace of ¥80 trillion through buying government bonds and risk assets. Also, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.16.

Bank of Canada - 22 Jan 2015

U.S. Stocks Extend Winning Streak

On Wednesday, U.S. stocks gained after a volatile trading session. This came in response to investors focusing on the European Central Bank (ECB) to deliver on monetary stimulus at its key meeting expected today. The ECB is currently considering a bond-buying program of about €50 billion a month in order to help revive the declining eurozone economy. U.S. stocks also got an added boost from an increase in oil prices as well as a surprise rate cut by the bank of Canada. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) advanced 39.05 points, or 0.2%, to 17,554.28. Gains were capped by a big decline in IBM shares which shaved 31 points off the index. Also on the upside was the S&P 500 index (SPX) which added 9.58 points, or 0.5%, at 2,032.13, led by a 1.8% gain in energy sector stocks. Following the upward trend was the Nasdaq Composite index (COMP) which advanced 12.58 points, or 0.3%, to 4,667.42. In economic news, the U.S. Commerce Department said on Wednesday that the number of building permits issued last month decreased by 1.9% to 1.032 million units from November’s total of 1.052 million. Analysts were expecting a rise of 1.3% to 1.055 million units in December. Data also showed that U.S. housing starts rose by 4.4% last month to hit 1.089 million units from November’s total of 1.043 million units.

markets

Gold Prices Dip Below $1,300

In Asian trading on Thursday, gold prices dipped. On the Comex division of the New York Mercantile Exchange, gold futures for delivery in February fell 0.22% to 1.290.80 a troy ounce. Meanwhile, overnight, the precious yellow metal maintained above the $1,300-level it reached on Wednesday, after U.S. housing sector data was released. Since the beginning of 2015, the price of gold has increased by 10 percent. In other commodity news, silver futures for March delivery eased 0.40% to trade at $18.120 troy ounce. This marked the highest level since the 19th of September 2015 and silver has gained almost 15 percent since the beginning of 2015. Elsewhere in metals trading, copper for March delivery gained 0.05% at $2.607 a pound, recovering from an overnight drop.

gold

In the Spotlight – EBay Shares Rise Despite Weak Outlook

After the closing bell on Wednesday, EBay Inc. (EBAY) reported adjusted fourth-quarter earnings of 90 cents a share on revenue of $4.92 billion% on continuing growth at its PayPal business. This was slightly above analyst expectations for 89 cents a share on revenue of $4.93 billion. Following an initial dip after the report, EBay shares traded at $54.90, up 2.9 percent. The e-commerce giant also said that it would cut about 2,400 jobs or 7% of its workforce from PayPal, eBay Marketplaces and eBay Enterprise in 2015. The company also issued a poor first quarter outlook for 2015 which fell below expectations on Wall Street. Added to this, EBay has also entered into an agreement with Carl Icahn over corporate governance. Icahn is currently the company’s largest active shareholder and in addition to certain corporate governance provisions to be adopted by PayPal as an independent company at the time of its spin-off from eBay, the agreement also appoints Icahn Capital executive Jonathan Christodoro to eBay’s current board. With regards to eBay Enterprise, the company is also currently exploring strategic options which could include an initial public offering or a sale. As the company said, “Enterprise is a strong business but it has become clear that it has limited synergies with either business and a separation will allow both to focus exclusively on their core markets.” Since the close of trading on Wednesday, EBay stocks have risen nearly 16 percent from a two-year low in October.

ebay

Gold Moves Above the $1,300 Mark

For the first time since August 2014, the price of gold has moved above $1,300 an ounce. This comes as investors are rushing back into the precious yellow metal seeking safe havens amid a variety of global issues including tensions in the Ukraine, political uncertainty in Greece as well as the turmoil triggered by the Swiss National Bank last Thursday. In early electronic trading on Wednesday, gold for February delivery traded at $1,303.20 an ounce, gaining 0.7% or $9.10. This came after this commodity settled at the highest price in five months on Tuesday at $1,249.20 an ounce. In the last seven straight sessions, gold has increased and it is now up approximately 10 percent, year to date. Also, gold exchange-traded-funds have seen high inflows, and according to Commerzbank, last Thursday and Friday saw the highest inflows on two straight days since November 2011. All eyes are now on the European Central Bank meeting on Thursday, which is widely expected to result in quantitative easing. This could negatively impact gold’s price because stimulatory actions by the ECB could cause risk assets to surge higher on Thursday and demand for safe haven assets such as gold could fall back.

Gold - 21 Jan 2015

Asian Shares Hold Firm

On Wednesday, Asian shares held firm with investors focusing on the European Central Bank which is expected to unveil a stimulus drive on Thursday. Also, the Bank of Japan (BoJ) maintained their existing policy and the Japanese yen (JPY) advanced. While this decision had been widely expected, some investors were hoping that Governor Haruhiko Kuroda from BoJ would make a surprise move since the central bank’s inflation target for next year looks increasingly illusive. The BoJ maintained its money-printing target and it maintained a bullish inflation outlook for 2016 even though it cut its 2015 projections following falls in oil prices in recent months. In Japan, the Nikkei 225 broke the upward trend and declined 0.9% while the USD/JPY dropped 0.8% percent to 117.83 after the BoJ did not expand its stimulus. Also, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.1% to hit its highest level in six weeks. Meanwhile, the U.S. stock market ended Tuesday’s trading session slightly higher, led by gains in technology stocks. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) advanced 3.66 points to 17,515.23 while the Nasdaq Composite index (COMP) added added 20.46 points, or 0.4%, to 4,654.85. Also on the upside was the $&P 500 index (SPX) which closed 3.13 points, or 0.2%, higher at 2,022.55.

Indices - 21 Jan 2015

USD Maintains 12-Year High

After the International Monetary Fund (IMF) cut its forecast for global economic growth in 2015, the U.S. dollar (USD) remained at 12-year highs against the other major currencies on Tuesday. In its latest World Economic Outlook report, the IMG projected the global growth to 3.5% for 2015 and 3.7% for 2016 after reducing its forecast by 0.3 percentage points for both years. Despite this, the IMF did raise its outlook for U.S. growth this year. At the close of U.S. trading, the EUR/USD dropped 0.25% to trade at 1.1575 while the USD/JPY climbed 0.74% to a one-week high of 118.45. Elsewhere, the GBP/USD gained 0.48% to 1.5185 while USD/CHF declined 0.55% to trade at 0.8746. Meanwhile, after Statistics Canada reported that manufacturing sales dropped 1.4% in November, confounding expectations for a 0.5% slip, the USD/CAD advanced 1.4% to trade at more than five-and-a-half year highs of 1.2110. Also, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.27% to 93.10. This was close to Friday’s 12-year peak of 93.56.

Global CUrrencies - 21 Jan 2015

In the Spotlight – IBM Fails to Impress While Netflix Knocks the Ball out the Park

On Tuesday, in after-hours trading, the shares of International Business Machine Corp (IBM) (IBM, -0.12%) declined in after-hours trading. This came after the company reported poor fourth quarter sales with a decline of 12 percent. Also on the downside was the corporation’s revenue which fell to $24.1 billion. This was below analyst expectation for revenue of $24.8 billion. IBM also reported adjusted EPS of $5.81 and gross margin was $53.3%, up from $52.4 percent last year. In terms of the 2015 outlook, the company failed to provide any information stating that it would provide guidance on the company’s earnings call. After the report, IBM shares advanced 2% but in recent trade, the shares declined 1.5% and they are currently trading at $156.95 a share.

IBM - 21 Jan 2015

With IBM failing to impress, the shares of Netflix (NFLX, +3.40%) surged in after-hours trading by more than 12 percent on Monday. This came in response to a fourth-quarter profit that was well above expectations as well as an upbeat outlook for net subscriber additions. The video streaming service reported that their net earnings in the fourth-quarter rose to $83.4 million, or $1.35, a share, from $48.4 million, or 79 cents a share, in the year-earlier period. Also, their adjusted earnings per shares which excludes non-recurring items, were 72 cents which beat analyst estimates of 45 cents. Also on the upside was the revenue which rose from $1.175 billion to $1.485. Netflix also stated that in the fourth quarter, the net subscriber additions totaled 4.33 million while they also expect to add 4.05 million new members in the current quarter. Netflix shares are currently trading at $358.80 a share.

Netflix - 21 Jan 2015

NZD/USD Declines Despite Positive Data

NZD USD - 20 Jan 2015

On Tuesday, the New Zealand dollar (NZD) traded lower against the U.S. dollar (USD). This decline came despite the release of strong business confidence from New Zealand while poor economic growth data out of China weighed on the currency. During late Asian trading, the NZD/USD hit its lowest level since the 15th of January trading at 0.7709. The currency pair subsequently consolidated down 076 percent at 0.772. The kiwi was also traded lower against the euro, with EUR/NZD gaining 0.68% to 1.5014. Earlier in the day, the Institute of Economic Research in New Zealand said that its business confidence index rose to 23 in the fourth quarter. This was up from a reading of 19 in the three months to September. The kiwi was unable to maintain though after data out of China showed that the gross domestic product (GDP) rose 1.5% in the last quarter. Analysts were expecting a growth rate of 1.7% and the GDP was also down from 1.9% in the third quarter. The reason for this impact is that China is New Zealand’s second biggest export partner. In other currency news, the U.S. dollar (USD) traded higher against most major currencies in thin trade due to closed markets as a result of a national holiday. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.26% to 93.09.

Global Currencies - 20 Jan 2015

Oil Markets Continue the Downward Trend

Oil markets have not been able to break their downward spiral and on Tuesday, oil prices continued to decline. This came in response to data which showed that China’s economic growth for 2014 missed a government target and also hit its weakest annual expansion in 24 years. This added fuel to investor concerns regarding energy markets which are already negatively impacted by a global supply glut as well as a slowing demand. According to the National Bureau of Statistics in China, the world’s second-largest economy grew 7.4%. This was less that the target for a growth of 7.5 percent. Also, growth in the fourth quarter held at its weakest in nearly six years, although coming in slightly better than expected at 7.3%. As a result, U.S. crude was trading down $1.32 at $47.37 a barrel while Brent crude traded at $48.71 per barrel, down 13 cents. With the decline in oil prices, the difference between the price in oil for immediate delivery and for barrels for supply at a later stage has increased. This is referred to as contango and the Brent contango between deliveries in March this year and a year later is currently around $10 per barrel. As Barclays explained in a note, “Producers globally are struggling to find buyers for their crude, which is reflected in the contangos in the Brent and WTI futures curves. Refiners will run any crude that is economically and technically possible to make a margin while margins are attractive (although product stocks are piling up). Any additional crude which is currently being stored will then be sold at higher prices at a later stage.

Contango Oil - 20 Jan 2015

European Stocks Hit High With Focus on ECB

On Monday, Europe’s broad equity-market benchmark closed higher, hitting a seven-year high. This came as a result of investors weighing up the prospects for quantitative easing from the European Central Bank expected at their meeting which will take place on the 22nd of January. The Stoxx Europe 600 index advanced 0.2% to 353.18. This marked the index’s strongest close since early January 2008 and this advance added to gains of nearly 4% over the past two sessions. Meanwhile, all eyes are on the future of Greece in the Eurozone with a national election expected to take place on Sunday. According to the latest polls, the anti-bailout Syriza party is holding on to its lead ahead of the vote. There has however been concern in the market that Syriza will roll back austerity policies if it were to win. Elsewhere in European trade, Swiss stocks rose for the first day in four sessions. As a result, the Swiss Market Index advanced by 3.2% to 8,150.77. Last week on Thursday and Friday combined, the index declined by 14.6% after the unexpected decision by the Swiss National Bank to scrap its currency cap. Meanwhile, in the United Kingdom, the FTSE 100 advanced 0.5% while Germany’s DAX 30 also rose 0.7% to 10,242.35.

World Market Data - 20 Jan 2015

In the Spotlight – Why is Samsung Considering a Stock Split?

On Tuesday, Samsung Electronics Co (KS:005930) said that they are currently considering to split their stocks. This move by the world’s largest smartphone maker is an attempt to appease their existing investors while encouraging new investors to jump on board. Samsung has been considering the split move for a while according to Robert Yi, the company’s head of investor relations. The South Korean tech giant is however debating the pros and cons of this move and the impact on the company both in the long and short term. As Yi explained, “We know it would have a psychological impact, but need to look further at how that might affect the company’s long-term value.”

Samsung - 20 Jan 2015

In November last year, Samsung announced a $2.0 billion share buyback which it is currently in the process doing. This move was made in order to appease their disgruntled shareholders as a result of ongoing declines in the company’s quarterly profits. Also, with a market capitalization of about $185 billion, Samsung accounts for nearly 17% of the weighting on the Kospi, South Korea’s benchmark composite index. On Tuesday, Samsung shares traded at 1.356 million won or US$$1,250 which is considerably lower than the high of 1.470 million won reached in June 2014.

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The Euro Regains against the Swiss Franc

EUR-CHF - 19 Jan 2015

After getting knocked off its feet on Thursday, the euro (EUR) regained some ground against the Swiss franc (CHF) on Friday. On Thursday, the EUR posted its largest ever one day decline against the franc, also hitting fresh 12-year lows against the U.S. dollar (USD). These moves come amid prospects for monetary easing by the European Central Bank (ECB) as early as this week. On Thursday last week, the Swiss National Bank (SNB) snapped its 1.20 per euro exchange rate cap that it imposed in September 2011 and as a result, the EUR/CHF traded at all-time lows of 0.8696. By late Friday, the EUR/CHF currency pair was trading at 0.9930, up 1.75% but the pair still ended the week with losses of more than 17%. In other currency news, the USD/CHF traded at 0.8586, up 2.25% after recovering from lows of 0.7360 reached in the previous session. The franc (CHF) still ended the week with gains of 15% against the dollar. Also, the EUR/USD was down 0.55% at 1.1567 in late trade on Friday. This came after this currency pair fell to lows of 1.1461 earlier in the day which marked the weakest since November 2003. In the week ahead, investors will be focusing on Thursday’s outcome of the ECB’s policy meeting as well as the bank’s post policy meeting press conference so watch out for this important information.

Currencies - 19 Jan 2015

Gold Prices Gain with Focus on Weak Inflation

On Monday, in Asian trading, gold prices held flat to slightly higher. Gold futures for February delivery traded at $1,277.10 a troy ounce on the Comex division of the New York Mercantile Exchange. On Friday last week, the precious yellow metal rallied to its highest level in more than four months. This came in response to demand for safe haven assets which was boosted amid turmoil in the currency market after the Swiss National Bank (SNB) scrapped its peg against the euro (EUR). On Thursday, gold surged $30.30, or 2.45%, to close at $1,264.80 an ounce. The SNB also cut interest rates deeper into negative territory in order to dissuade investors from buying the franc (CHF). As a result, gold prices moved higher as lower interest rates can give the precious metal a lift as it decreases the relative cost of holding on to the metal, which does not offer investors any similar guaranteed payout. In other commodity news, silver futures for March delivery fell to $17.678, down 0.41% on the Comex while copper lost 0.70% to $2.613 a pound. On the 14th of January, the price of copper hit $2.423 a pound, a level not seen since June 2009.

Gold Rises - 19 Jan 2015

Dow Advances 190 Points

On Friday, U.S. stocks rallied breaking five straight sessions of losses. This advance came in response to rallying oil prices as well as positive consumer sentiment which jumped to an eleven-year high. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) advanced 109.86 points, or 1.10%, to close at 17,511.57. The index lost 1.3% over the week. Also on the upside was the S&P 500 index (SPX) which rose 26.75 points, or 1.34%, to end at 2,019.42. A rally in oil prices lifted energy sector stocks, rising 3.2%, but gains were across the board and despite this increase, the index was down 1.2% over the week. Following the upward trend was the Nasdaq Composite index (COMP) which gained 63.56 points, or 1.39 percent, to finish at 4,634.38, down 1.5% for the week. On Friday data from the University of Michigan/Thomson Reuters showed that consumer sentiment soared to an 11-year high jumping to 98.2, the highest level since 2004. This came from a final December reading of 93.6. Other data released revealed that the Consumer Price Index (CPI) declined 0.4% in December after falling 0.3% in November. Core CPI, excluding volatile components such as food and energy, was unchanged in December, following a 0.2% increase in October and a 0.1% rise in November.

World Market Data - 19 Jan 2015

In the Spotlight – Goldman Sachs Reports Top Earnings – Morgan Stanley To Follow

On Friday, Goldman Sachs reported their fourth quarter earnings and the results were overall positive. The banking giant reported earnings of $4.38 a share after analysts had only expected earnings of $4.32 a share. Meanwhile, Goldman Sachs also reported revenue of $7.69 billion against expectations for $7.64 billion in revenue. While GS beat market expectations, the company’s revenue numbers still disappointed the market. As Marty Mosby, banking analyst at Vining Sparks, explained, “Behind the scenes, the market thought [revenues] could be around $8 billion. What they ended up with is around $7.7 billion.” The increase of six cents above expectations by Goldman Sachs in earnings still marks the smallest increase for the bank since the third quarter of 2011. Also the downside, the revenue in the bank’s division that trades bonds, currencies and commodities fell to $1.22 billion, down 29%, while investment banking revenue also fell to $1.44 billion, down 16%. As a result, shares declined in premarket trading and the shares of Goldman Sachs are currently trading at $177.23 per share.

Goldman Sachs - 19 Jan 2015

Meanwhile, on Tuesday, before the market opens, Morgan Stanley is expected to report its fourth-quarter results. Analysts are expecting the corporation to report earnings of 48 cents compared with 50 cents a year earlier. Also, the Wall Street firm is expected to report revenue of $8.08 billion against revenue of $8.2 billion a year earlier. Will Morgan Stanley beat forecasts?

Morgan Stanley Earnings - 19 Jan 2015

On Monday, U.S. markets will remain closed for the Martin Luther King Day holiday while Switzerland is to release data on producer price inflation (PPI). Meanwhile in the euro zone, Germany’s Bundesbank is to publish its monthly report.

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