Thursday, 7 May 2015

Daily Market Review 07.05.2015

Before the market opens on Thursday, Priceline Group Inc. (PCLN, +0.07%) is scheduled to report first quarter earnings results. Investors are optimistic that the online travel booking company will beat expectations since they have done so for the last twenty quarters. Added to this, investors expect Priceline to provide an adjusted profit outlook for the 2nd-quarter which will be below the current projections. The reason for this expectation is that Priceline has done this for the past 6 quarters. According to analysts surveyed by FactSet, Priceline is expected to post earnings per share of $7.71 which is down from the EPS of $7.81 posted a year ago. This is also above the price range of $7.20 and $7.75 which was provided by Priceline in February. Meanwhile, Estimize expects the EPS to be at $8.11. Also, the company is expected to report revenue of $1.8 billion. This is up 9.6 percent from revenue of $1.64 billion reported a year ago. Estimize forecasts revenue at $1.84 billion. On Wednesday, Priceline shares traded at $1264.15, up 0.1%. Since the end of the last quarter, shares are up 8.6% and 11 percent year to date. Interestingly, the Priceline share price is 7.8 percent below is closing high which it reached on the 5th of March last year at $1370.43 per share.

In U.S. trading on Wednesday, stocks declined. This came after Janet Yellen, the Chairwoman of the Federal Reserve, stated that stock values were “quite high” which prompted investor fear. As a result, the main indices declined in late trading and the Nasdaq Composite index (COMP) lost 0.4%, or 19.68 points, to 4,919.64. Also on the downside was the Dow Jones Industrial Average (DJIA) which briefly turned negative after declining more than 170 points in early trading. The blue chip index closed the session 0.5%, or 86.22 points, lower at 17,841.98. Meanwhile, the S&P 500 index (SPX) also failed to advance and the benchmark index declined 0.5%, or 9.30 points, at 2,080.16. Despite this decline, the index is still positive for the year, up 0.5% year-to-date. Losses were led by technology, utilities and telecoms stocks. Adding to the negative sentiment in the market was a lower-than-forecast ADP employment report which showed that 169,000 private-sector jobs were created in the U.S. in April. This is down from the 175,000 jobs that were created in March.

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On Wednesday, in currency trading, the U.S. dollar (USD) traded lower declining to a 3-month low. This came in response to poor economic data out of the U.S. which prompted negative sentiment regarding the strength of economic recovery in the country. In their report, ADP stated that employment in the non-farm private sector employment rose by 169,000 in April compared with 175,000 in March. This missed expectations for a gain of 200,000. In a separate report, data showed that productivity in the non-farm business sector labor dropped by 1.9% in the first quarter of 2015. This missed expectations for a decline of only 1.8%. The EUR/USD traded at 1.1354, up 1.51%. This increase came after Greece made a small interest payment to the IMF (International Monetary Fund). Also, the USD/JPY traded at 119.38, down 0.36% while the GBP/USD traded at 1.5273, up 0.61%. The U.S. dollar index was at 93.99, down 1.34%, marking the lowest level since the 19th of February.

On Thursday, in early morning Asian trading, crude oil prices fell. This came as investors took profits on overnight gains as a result of a market that is still oversupplied. Last week, crude stockpiles in the U.S. dropped by 3.9 million barrels which beat expectations for a build of 1.5 million barrels. This decline marked the 1st time this year that crude inventories in the U.S. declined which helped to alleviate concerns regarding the Cushing Oil Hub stockpiles in Oklahoma reaching full storage capacity by the start of the summer. WTI crude oil for delivery in June traded at $60.49 a barrel, down 0.72 percent on the NYMEX. Meanwhile, on Wednesday, Brent for June delivery settled at $67.73 a barrel, up $0.21, on the Intercontinental Exchange (ICE).

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