Daily Market Review 19.02.2015

Indices

After the minutes from the latest policy meeting of the U.S. Federal Reserve were released yesterday, U.S. stocks ended marginally lower. The minutes of the meeting showed ambiguity, with some officials stating that they were not in a hurry to increase interest rates as this would harm the economic recovery in the country while ‘several’ felt that delaying this rate hike would cause high inflation. The bond market was also impacted by these minutes and yields decline 2.08 percent, down 6 basis points. At the close of trading, the Dow Jones Industrial Average (DJIA) dropped 0.1%, or 17.41 points, to 18,030.17. This decline was led by losses in Chevron Corp and Exxon Mobil. Also on the downside was the S&P 500 index (SPX) which closed just below its previous record close at 2,099.66. As a result of dropping oil prices, energy stocks led the losses on the SPX while the Nasdaq Composite index (COMP) broke the trend and closed up 0.1% or 7.10 points, at 4,906.36.

Currencies

Despite the release of poor economic data in the U.S., the U.S. dollar (USD) traded higher against most major currencies. Earlier in the day, the Commerce Department reported that producer prices in the country dropped by 0.8 percent in January. Analysts were expecting a decline of only 0.4% decline. Also, core producer prices dropped in January by 0.1 percent, missing expectations for a gain of 0.1%. In a separate report, the U.S. Commerce Department also stated that issued building permits in January dropped to 1.053 million units, down 0.7% with December’s total at 1.060 million. U.S. housing starts also dropped to 1.065 million units in January, down 2.0 percent. Meanwhile, in their report, the Federal Reserve showed an increase of 0.2% in industrial production in January while the capacity utilization rate held steady in January at 79.4%. In currency trading, the EUR/USD traded at 1.1363, down 0.41% while GBP/USD traded at 1.5442, up 0.58%. The USD/CHF gained 0.61 percent to trade at 0.9426 while USD/JPY held steady at 119.20.

Stocks

When you hear about Apple Inc. (NASDAQ:AAPL.O), you can’t help but think about a technology giant behind the production of computers, phones and other hi-tech gadgets. So when you hear that A123 Systems, the electric-car battery maker, has sued Apple, you must be wondering why. According to A123, the iPhone maker has been poaching their top engineers in order to build a battery division which has added further evidence that Apple is in the process of also developing a self-driving electric car. Tesla Inc. has also had Apple knocking on their door, poaching their top engineers who are experienced in car systems. Other automakers and industry experts have also been on Apple’s radar. According to A123, Apple started aggressively poaching their engineers in June 2014 and as a result, many of their top staff involved in critical projects have now jumped ship despite breaking their agreements of employment. The five former A123 employees are also being sued. Apple is currently trading at $128.71 a share.

Commodities

 In Asian trading on Thursday, crude oil prices dropped more than 3 percent. This came in response to industry stockpiles data in the U.S. after the American Petroleum Institute released data on Wednesday which showed that stocks of crude had increased by 14.3 million barrels. Gasoline stocks also rose by 1.3 million barrels while distillates fell by 2.7 million barrels. Today, the Department of Energy in the U.S. will release its figures for the same period. Crude oil for April delivery traded at $51.25 a barrel, down 2.98 percent on the NYMEX while Brent oil for delivery in April traded at $61.53 a barrel on the ICE Futures Exchange in London, down 1.61% or $1.00.