Tuesday, 9 June 2015

Daily Market Review 09.06.2015

Wal-Mart Shares Rise on Upgrade: In early trading on Monday, the shares of Wal-Mart Stores Inc. (NYSE: WMT) rose 0.3 percent to trade at $73.28 a share. This increase came in response to a rating upgrade by analysts at Raymond James. The retail corporation was upgraded from ‘outperform’ to ‘strong buy’ during a valuation call which took place in the morning. Added to this, analysts also issued a price target of $86 stating that Wal-Mart currently offers investors more reward than risk. According to Raymond James, Wal-Mart will start to see returns on the investments it has made in its stores in the U.S. Wal-Mart currently operates through 3 business segments which include Wal-Mart International, Wal-Mart U.S. and Sam’s Club. Meanwhile, the team at TheStreet Ratings also rated Wal-Mart Stores Inc. as a ‘Buy’ with a rating score of ‘B’. This upgrade was based on the team’s forecast that the retail giant has a variety of strengths which can offer investors a good performance opportunity. These strengths include Wal-Mart’s largely solid financial position, reasonable debt levels as well as acceptable valuation levels. Wal-Mart is currently trading at $72.95 a share.

In U.S. trading on Monday, stocks declined marking the 3rd consecutive session of declines for the main indices. It was evident that the markets felt the pressure of a selloff in European equity markets while investors also remained cautious after the strong jobs report which was released on Friday. This raised concerns that the Federal Reserve could increase interest rates as soon as October while the next Federal Open Committee Meeting (FOMC) is scheduled for the 16th and 17th of June. At the close of trading, the Dow Jones Industrial Average (DJIA) slipped 0.2%, or 32 points, to 17,816. Also, the S&P 500 index (SPX) declined 0.2%, or 4 points, or 0.2% to 2,088. Following the downward trend was the tech heavy Nasdaq Composite index (COMP) which dropped 0.3%, or 15 points, to 5,053.

In forex trading on Monday, the U.S. dollar (USD) traded lower. This came as investors locked in profits from the recent rally seen in the greenback as a result of the strong May jobs report released on Friday. After the Labor Department reported that the economy added 280,000 jobs in May, the USD rallied and it also boosted investor confidence that the economy could be on track for a rebound after a weak 1st quarter. The EUR/USD traded at 1.1212, up 0.86 percent while the USD/JPY traded at 125.23, down 0.38%. Also, the greenback traded steady against the British pound and the Canadian dollar with GBP/USD at 1.5269, and with the USD/CAD little changed at 1.2443. The U.S. dollar index was at 95.80, down 0.60 percent.

Crude oil prices gained in early trade in Asia on Tuesday. This came as investors noted the scope for China to ease their monetary policy further after weak price data was released while investors have also shifted their focus to the supply data which will be provided by the American Petroleum Institute (API) today. According to data released in China, consumer prices declined 0.2 percent in May while producer prices also dropped 4.6 percent. Added to this, the National Bureau of Statistics in China said that as a result of falling egg and vegetable prices, the CPI was dragged down by 0.39 percentage points. WTI crude oil for July delivery traded at $58.46 a barrel, up 0.54% on the NYMEX. Also, on Monday, Brent crude oil for July delivery traded at $62.62 a barrel, down 1.07% or $0.69 on the Intercontinental Exchange (ICE).

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