Markets Commentary 05.05.2015

STOCKS

On Monday, Walt Disney Co. (DIS, +0.46%) stated that they would release their second quarter earnings earlier than scheduled. This change in schedule has come about as a result of the sudden recent death of Dave Goldberg who is the husband of Sheryl Sandberg who is a board member at Disney and also the Chief Operating Officer at Facebook (FB, -0.23%). Instead of reporting after the closing bell, Disney will now report their earnings on Tuesday at 8 am Eastern time which will then be followed by the conference call at 9:30am Eastern. According to Disney, this shift will enable others to attend the funeral of Goldberg. On Friday last week, The Wall Street Journal report that Goldberg, 47, who was the chief executive of SurveyMonkey, suddenly died. This news was also confirmed by a post on his Facebook page on Saturday morning by Goldberg’s brother. Dave Goldberg used to be an executive at Yahoo (YHOO, -1.11%) and then in 2009, he joined SurveyMonkey. Goldberg was instrumental in building the company from 12 employees to over 450 employees. According to the Journal, late last year, SurveyMonkey was valued at almost $2 billion as part of a $250 million fundraising round.

INDICES

In U.S. trading on Monday, stocks close higher while the main indices advanced on low volatility and smaller trade volumes. Investors reacted well to the factory orders report which showed an increase of 2.1 percent in March. This met analyst expectations. At the close of trading, the Nasdaq Composite index (COMP) rose 0.2%, or 11.54 points, at 5,016.93. Following the upward trend was the S&P 500 index (SPX) which advanced 0.3%, or 6.20 points, at 2,114.49. This benchmark index closed only a few points behind the record it set on Friday last week and these gains were led by increases in the financial sector. Meanwhile, the Dow Jones Industrial Average (DJIA) also gained, rising 0.3%, or 46.34 points, to 18,070.40. Interestingly, implied volatility has now declined to its lowest level this year and this was evident on the CBOE Volatility index (VIX) which dropped below 13 while trading volumes on Monday also declined below their thirty day average level.

CURRENCIES

In currency trading on Monday, the U.S. dollar (USD) traded higher. This came after data showed that for the first time in 8 months, factory orders in the U.S. rose in March. According to the report by the Census Bureau in the U.S., in March, factory orders advanced 2.1 percent which beat expectations for a gain of only 2.0 percent. Meanwhile in February, factory orders declined by 0.1 percent. Added to this, according to the report by the Institute for Supply Management on Friday, the manufacturing sector was stable in April. This was positive after data showed a slowdown in the 5 previous months. The EUR/USD traded at 1.1154, down 0.40 percent. This decline came after data showed that manufacturing growth in the euro zone declined slightly in April and the final reading of Markit’s manufacturing PMI (purchasing managers’ index) came in at 52.0. Also, the GBP/USD was trading at 1.5115, down 0.15% while USD/JPY held steady at 120.14. The U.S. dollar index was at 95.58, up 0.20%.

COMMODITIES

On Tuesday, in early morning Asian trading, crude oil prices held steady. Later today, investors will turn their attention to the stockpile report by the American Petroleum Institute for gasoline, crude and distillate stocks for last week. On Wednesday, the Department of Energy in the U.S. will release their data on the same. Meanwhile, WTI crude oil for delivery in June traded at $58.92 a barrel, down 0.02%, on the NYMEX. Brent crude oil for delivery in June traded at $58.92 a barrel on Monday, down 0.11%, or 0.07, on the Intercontinental Exchange (ICE). Earlier in the session, Brent crude was trading at $67.08 a barrel which marked the commodity’s highest level since the 9th of December.