STOCKS
Tesla Declines on Analyst Downgrade: In premarket trade on Wednesday, the stock of Tesla Motors
Inc. (TSLA, -4.86%) plunged 1.8 percent. This marked an extension of a sharp
selloff which the electric car maker experienced in the previous session. This
decline came in response to a downgrade by Brad Erikson, an analyst at Pacific
Crest, who stated his concerns regarding the valuation of the stock price.
According to Erikson, a fair valuation for Tesla’s stock is $293. This is
currently 9.4 percent above the closing price on Tuesday. Despite the
downgrade, Erikson wrote in a note to his clients that Tesla can be considered
one of the most innovative companies which are unique to other competitors in
the space. Based on this, Erikson feels that the current stock price is a fair
valuation. On Tuesday, the shares of Tesla slumped 4.2% which marked the
biggest one day decline in the last 5 months. This decline came as a result of
a downgrade by Deutsche Bank who also cited valuation concerns. Despite the two
blows, Tesla’s stock is still up year to date by 20 percent. This can be
compared to the increase in the S&P 500's index (SPX, -1.50%) which has
only gained 1.1 percent over the same period.
INDICES
On Wednesday, in morning trade, U.S. stocks saw a major
selloff which was prompted after the New York Stock Exchange was stopped for 3
and a half hours. Despite the morning decline, these stocks then turned and
ended the trading session with modest gains. Adding to the pressure was the
unresolved debt crisis in Greece while the major selloff in China also rattled
some cages. At 11:32 a.m. Eastern, NYSE securities trading was stopped due to a
technical glitch. Trading then only resumed at 3:10 p.m. Eastern and according
to a spokesperson for the exchange, the shutdown of the exchange did not occur
as a result of a cyber-attack. As a result, the CBOE Volatility index (VIX,
+22.19%) rose above 19, up 22%. Meanwhile, the Dow Jones Industrial Average
(DJIA) declined 1.5%, or 261.49 points, to 17,515.42. This marked the blue
chip’s lowest closing level since February. Also on the downside was the
S&P 500 index (SPX) which dropped 1.7%, or 34.65 points, to 2,046.69. This
level also marked the benchmark index’s lowest closing level since March. Also,
the Nasdaq Composite index (COMP) dropped 1.8%, or 87.70 points, to 4,909.76.
CURRENCIES
On Wednesday, the U.S. dollar (USD) traded lower. This came
as investors focused on the debt crisis in Greece as the country was given
until Thursday to present a new proposal to creditors by the eurozone
officials. Added to this, due to a selloff and a major decline in Chinese
shares, the Japanese yen (JPY) rallied as the demand for safe haven assets was
boosted. The USD/JPY traded at 121.11, down 1.16 percent, which also marked the
pair’s lowest level since the 22nd of May. Against the euro, the JPY traded at
a 1-month high with the EUR/JPY at 133.86, down 0.79%. Meanwhile, the EUR/USD
traded at 1.1047, up 0.32% while the GBP/USD traded at 1.5341, down 0.77
percent. Also, the U.S. dollar index was at 96.63, down 0.26%.
COMMODITIES
On Thursday, crude oil prices gained in early Asian trade.
This came in response to data which showed that consumer prices in China
increased in June as the CPI rose above the 1.3% gain seen by 1.4 percent.
Meanwhile, the PPI declined 4.8 percent which was higher than the expected
decline of 4.5%. WTI crude oil for delivery in August traded at $52.12 a
barrel, up 0.90% on the NYMEX. On Wednesday, Brent crude oil for delivery in
August traded between $55.88 and $57.75 a barrel on the Intercontinental
Exchange (ICE) in London. According to data released by the EIA (Energy
Information Administration) on Wednesday, for the week ending on the 3rd of
July, crude oil inventories increased by 400,000 barrels which was above the
expectations for a 500,000 draw. Crude stockpiles in the country are now at
465.8 million barrels.
The Daily Market Review brought to you by Billionaire Forex UK in collaboration with STOCK.
No comments:
Post a Comment