STOCKS
Netflix Shares Surge on Possible Stock Split: According to reports, we could see Netflix Inc. (NFLX,
+4.22%) headed for a stock split. During an investors meeting on Tuesday,
shareholders approved a proposal to increase the maximum number of shares
outstanding. This means that we could see Netflix’s authorized shares go from
the current 170 million to five billion. According to a spokesman from the
company, the final results will be filled in an 8K form on Thursday with the
SEC (Securities and Exchange Commission). Reed Hastings, the Chief Executive of
Netflix, explained that the decision to increase the number of shares was based
on authorized capital which a few Silicon Valley companies have. As a result of
the move for an increase in the number of shares, talk of a possible stock
split has now emerged. A stock split normally occurs when a company’s stock is
out pricing other stocks of companies within the same sector or when the share
price of a company is too high for investors. On Wednesday, Netflix shares were
trading at around $686 a share. This puts them as the 2nd highest stock on the
S&P 500 index (SPX). According to a Netflix spokesman, Hastings is
currently seeking the approval of the board for the stock split yet no
information about this split has been provided. Added to this, Netflix also recently
announced that they have entered into a deal valued at $30 million in order to
distribute the movie ‘War Machine’ featuring Brad Pitt. This movie is set to
debut in 2017 and it is based on the book ‘The Operators: The Wild and
Terrifying inside Story of America’s War in Afghanistan’ by Michael Hastings.
INDICES
In U.S. trading on Tuesday, U.S. stocks rallied. As a
result, the main indices gained back some of the losses we have seen over the
last 4 days of consecutive losses and as a result, these indices were on track
to post the largest gain in one day in the month of June. According to Wall
Street analysts, this rally was prompted by a combination of a strong U.S.
dollar (USD) which as a result boosted commodity prices while optimism regarding
Greece receiving additional bailout cash from creditors was evident among
investors. At the close of trading, the Dow Jones Industrial Average (DJIA)
advanced 1.4%, or 250 points, to 18,016. This benchmark index turned positive
for the year. Also on the upside was the Nasdaq Composite index (COMP) which
gained 1.3%, or 63 points, to 5,076 while the S&P 500 index (SPX) rose
1.2%, or about 25 points, to 2,105. Gains were led by financial and technology
stocks which rose more than 1.5 percent each while energy shares also rallied
as a result of gains in the oil prices.
CURRENCIES
In forex trading on Wednesday, the U.S. dollar (USD) traded
at a 3-week low. This came as investors continued to lock in profits from the
greenback’s rally last week. Trade was quiet as a result of no economic data
expected out of the U.S. The EUR/USD held steady and traded at 1.1283. The
single currency rose to a high of 1.1385 during the session as a result of the
continued selloff in European government bonds. Added to this, German 10-year
bund yields rose to the highest levels which were last seen in September last
year. In other currency news, the GBP/USD traded at 1.5519, up 0.88% while the
USD/JPY traded at 122.78, down 1.27 percent. Against the New Zealand dollar and
the Swiss franc, the U.S. dollar traded lower with the NZD/USD up 0.88% at
0.7193 and with USD/CHF down 0.16 percent at 0.9294. Meanwhile, the U.S. dollar
index was at 94.81, down 0.37 percent.
COMMODITIES
On Thursday, crude oil prices declined in early Asian trade.
Investors took profits from an overnight rally in the U.S. which was a clear
indication that efforts are being made to decrease the domestic output while
demand is steadily climbing. WTI crude oil for July delivery traded at $61.09 a
barrel, down 0.56% on the NYMEX. Also, Brent crude oil for delivery in July
traded at $65.64 a barrel on Wednesday, up 1.16%, or $0.76 on the
Intercontinental Exchange (ICE). , According to the weekly report by the EIA
(Energy Information Administration), crude stockpiles declined last week by 6.8
million barrels to 470.6 million barrels. This beat analyst expectations for a
rise of 1.8 million barrels which was bullish for the commodity.
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