Tuesday, 21 April 2015

Daily Market Review 21.04.2015

On Thursday, after the close of trading, Google Inc. (GOOGL, +2.21%) is expected to report 1st quarter earnings. With increased competition from other mobile advertising rivals such as Facebook Inc. (FB, +2.87%), Google has struggled to surpass revenue expectations. According to Ross Sandler, an analyst from Deutsche Bank, investor sentiment around Google has declined on concerns that their paid-clicks will decline. For the first quarter, the internet giant reported that there was an 11 percent growth in paid-clicks yet this missed analysts’ expectations for a 17% increase. Analysts also expect Google to report adjusted EPS (earnings per share) and GAAP of $6.61. This would mark a 5.4 percent improvement year over year compared to last year’s results of $6.27. Added to this, analysts forecast that Google will report revenue of $14 billion. This excludes traffic acquisition costs. Compared to the $12.2 billion reported at the same time last year, this will mark a 15 percent improvement. Over the last year, Google shares have been trading flat and are currently at around $544.74 a share. Over the last 3 months, there has been a growth of 7 percent in the company’s share price.

In trading on Monday, U.S. stocks rallied to post their biggest advance in 3 weeks. This increase came in response to better than expected earnings reports which boosted investor sentiment. With Microsoft Corp, Apple Inc. and IBM Corp leading the gains, the Dow Jones Industrial Average (DJIA) advanced 1.2%, or 208.63 points, to 18,034.93. Twenty four of the blue chip index’s 30 components finished in positive territory. The top performer on the DJIA was International Business Machines (NYSE:IBM), which traded at $166.16, up 3.42% or 5.49 points. Also advancing was the S&P 500 index (SPX) which closed 0.9%, or 19.22 points, higher at 2,100.40, led by gains in the technology sector. The top performer on the SPX was Hasbro Inc. (NASDAQ:HAS) which advanced 12.55 percent to 74.16. Meanwhile, the Nasdaq Composite index (COMP) also rose and ended the session up 1.3%, or 62.79 points, at 4,994.60. Also, the CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was at 13.27, down 4.46 percent.

On Monday, the U.S. dollar (USD) held gains on low trading volumes. Investor sentiment on the greenback was vulnerable as a result of the soft economic data released last week on the consumer price index and core consumer prices. The EUR/USD traded at 1.0756, down 0.48 percent. This decline comes as concerns mount regarding Greece and its current inability to reach an agreement with its creditors on economic reforms for bailout funds. Investors are now concerned that Greece could be forced out of the eurozone. Also, the British pound and the Japanese yen traded lower against the USD with GBP/USD down 0.31% to 1.4912 and with USD/JPY up 0.3% and trading at 119.30. Against the Canadian and Australian dollars, the U.S. dollar traded mixed with AUD/USD down 0.71% at 0.7730 and with USD/CAD down 0.47% to trade at 1.2190. Also, the U.S. dollar index was at 98.00, up 0.39%.

On Tuesday, in morning Asian trading, crude oil prices declined. This came as investors turn their attention to the industry data on petroleum stocks expected out of the U.S. today while tensions in Yemen have prompted concerns regarding supply. Today, the American Petroleum Institute (API) will release its estimates of the stockpiles of distillate, gasoline and crude as of last week. On Wednesday, this will then be followed by a report from the U.S. Department of Energy. WTI crude for delivery in June traded at $57.78 a barrel, down 0.18 percent, on the NYMEX. Overnight on Monday, crude oil prices rose in response to the escalating tensions in Yemen which reduced investor concerns regarding the global supply glut of crude oil. Meanwhile, Brent crude futures for delivery in June traded at $63.52 a barrel on Monday on the Intercontinental Exchange (ICE). Last week, both Brent and WTI crude futures reached a four-month high.

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