Wednesday, 5 August 2015

Daily Market Review 05.08.2015

Since their market debut in June this year, Fitbit Inc. (FIT, +0.53%) has done nothing but impress and so, all eyes will be on this wearable fitness-tracker company when they report their earnings when the market closes on Wednesday. According to analysts surveyed by FactSet, Fitbit is expected to report sales of $319 million which is a lot lower than the consensus from Estimize at $329.94 million. In addition, the company is expected to report earnings of 9 cents a share while the Estimize consensus is at 12 cents earnings per share. Let’s take a look at the facts. On the 18th of June, Fitbit went public. On that same day, the company’s share price skyrocketed 55 percent. The shares were originally priced at $20 and in the past month, we have seen an increase of 19 percent. Fitbit shares are now trading at $49.28 each. Investors will also be analyzing and looking out for the enthusiasm which was evident at Fitbit’s IPO as this should be clearly evident in their gross margin, sales momentum and outlook. While the company is currently facing lawsuits from Apple (AAPL, +0.10%), which has now stepped in as a competitor, as well as from Jawbone, Fitbit seems to be racing ahead and it seems that this company has managed to push itself into first place in the fitness and wearable sector. According to analysts at Stifel, the release of the Apple Watch has not seemed to have any major impact in the dedicated fitness category, leaving the path open for the likes of Fitbit. In addition, Stifel analysts forecast that the 2nd quarter earnings report from Fitbit will include the number of paid active users as well as the details of the number of units sold. The majority of the sales will also likely consist of Fitbit’s Charge HR product, which is a heart-rate tracking and fitness wristband. Production of the Charge HR has increased since it was released earlier this year which should boost Fitbit’s full-year outlook as well.

On Tuesday, U.S. stocks traded lower. The main indices were pushed off their session lows after one Federal Reserve president indicated that a hike in interest rates is likely in September as long as there is no significant deterioration in the economy. At the close of trading, the S&P 500 index (SPX) declined 0.2%, or 4.72 points, to 2,093.32. This came after the index was down as much as 9 points during the trading session. Also on the downside was the Nasdaq Composite Index (COMP) which lost 0.2%, or 9.84 points, to close at 5,105.55. This tech heavy index was down as many as 23 points during the trading session. Also, the Dow Jones Industrial Average (DJIA) dropped 0.3%, or 47.51 points, at 17,550.69. This blue chip index was down nearly 93 points intraday. One of the poorest performers of the day was Apple Inc. (AAPL, -3.21%) whose shares closed down 3.8%.

On Tuesday, the U.S. dollar (USD) trimmed losses. This came after data showed that factory orders in the U.S. in June rose in line with expectations while investors have now shifted their attention to the release of U.S. nonfarm payrolls on Friday. The Census Bureau in the U.S. reported on Tuesday that factory orders increased by 1.8% in June. The EUR/USD traded steady at 1.0952 while the GBP/USD traded at 1.5572, down 0.08%. Against the Swiss franc, the Canadian dollar and the Japanese yen, the U.S. dollar traded mixed with the USD/CHF up 0.33% at 0.9724, the USD/CAD down 0.10% at 1.3142, while the USD/JPY traded steady at 124.03. Also, the U.S. dollar index was steady at 97.39.

In Asian trading on Wednesday, crude oil prices rose slightly. This came after a U.S. industry survey showed sharp declines in the crude and gasoline stocks as of last week. According to the weekly report by the API (American Petroleum Institute), for the week ended 31 July, crude stocks dropped by 2.4 million barrels, while gasoline supplies declined by 1 million barrels and distillates increased by 1.7 million barrels. WTI crude oil for September delivery traded at $45.88 a barrel, up 0.05%, on the NYMEX. Also, on Monday, Brent crude oil for delivery in September traded at $50.00 a barrel, up 0.97%, or $0.48, on the Intercontinental Exchange (ICE) in London. 

The Daily Market Review brought to you by Billionaire Forex UK in collaboration with STOCK. 

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