Monday 10 August 2015

Daily Market Review 10.08.2015


STOCKS
On Monday, the 10th of August, all eyes will be on the casual restaurant chain, Shake Shack Inc. (SHAK, +10.81%) which is expected to report second quarter earnings. Analysts are expecting the company to announce earnings per share of $0.03 on revenue of $42.80 million for the quarter. This will be slightly down on the $0.04 EPS the company reported in the first quarter. For the same period, the company reported revenue of $37.80 million. On average, analysts also expect Shake Shack to post earnings per share of $0.13 for the current fiscal year and $0.16 EPS for the next fiscal year. On Friday, Shake Shack shares opened at $71.64 a share and this put the company’s market capitalization at $863.84 million. The company also has a 1-year low of $38.63 and a 1-year high of $96.75. Interestingly, on the 14th of June, Zacks lowered their rating on Shake Shack from a buy to a hold. In addition, on the 9th of July, Goldman Sachs downgraded Shake Shack from a neutral rating to a sell rating and they also set the price target for the company at $37.00. Another downgrade was also done by Morgan Stanley from an equal weight rating to an underweight rating with a price target of $38.00. Shake Shack Inc. owns and operates restaurants located in the U.S. These Shack restaurants are well known for being roadside burger stands which serve traditional American food such as hot dogs, burgers, fries, shakes as well as wine and beer. Today there are 63 Shacks located all around the world with 31 located in the U.S. itself. The big question is will Shake Shack serve top earnings on Monday?

INDICES
On Friday, U.S. stocks closed lower. In addition, the Dow Jones Industrial Average (DJIA) hit its worst losing streak since 2011 of seven straight days of losses and this was prompted by the average jobs report which missed analysts’ expectations. As a result, investors still expect the Federal Reserve to increase interest rates as early as September this year. According to the nonfarm-payrolls report released on Friday, in July, the U.S. gained 215,000 jobs. Also, the unemployment rate remained unchanged at 5.3 percent. At the close of trading, the DJIA dropped 0.3%, or 46.37 points, to 17,373.38. This blue chip index was down by 141 points earlier in the session and this current losing streak has cut almost 380 points off the index for a loss of 2.1 percent. For the week, this index lost 1.8%. Also on the downside was the Nasdaq Composite Index (COMP) which declined 0.3%, or 12.90 points, to 5,043.54, losing 1.7% off the week while the S&P 500 index (SPX) finished 0.3%, or 5.99 points, lower at 2,077.57. This index was off 1.3 percent for the week.

CURRENCIES
On Friday, the U.S. dollar erased gains. This came as investors locked in profits after the non-farm payrolls data was released on Friday. According to the Labor Department, in July, the U.S. economy added 215,000 jobs which missed expectations for an increase of 223,000. In addition, data also showed that the average hourly earnings in the U.S. rose 0.2% in July. This was also in line with expectations. The EUR/USD traded steady at 1.0931 while the GBP/USD traded at 1.5475, down 0.24%. Against the currencies in Japan, Canada and Switzerland, the greenback traded mixed with the USD/JPY down 0.32% at 124.32, the USD/CAD down 0.31% at 1.3069 while the USD/CHF rose 0.21% to trade at 0.9828. Also, the Australian dollar traded higher than the USD with AUD/USD at 0.7400, up 0.75%. The U.S. dollar index was at 97.72, down 0.14 percent.

COMMODITIES 
Crude oil prices continued to decline on Monday in early Asian trading. This came after disappointing trade data was released out of China on the weekend which prompted demand concerns among investors. According to data released by the government on Sunday, for July, Chinese inflation rose 1.6%. This was above expectations for an increase of 1.5%. Also the PPI (producer price index) declined by more than expected in July, down 5.4%. In addition, on Saturday, data showed that China’s trade surplus narrowed in June to $43.0 billion from $46.5 billion in June. WTI crude oil for delivery in September traded at $43.68 a barrel, down 0.44%, on the NYMEX. Brent crude oil for September delivery traded at $48.61 a barrel, down 1.84%, or $0.91, on the ICE Futures Exchange in London.

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

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