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Daily Market Review – 01 May 2015

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Daily Market Review – 01 May 2015

May 1 2015, 08.30am GMT



Apple Gives a Heads Up on Bad News


STOCK.com   Stocks

Apple Inc. (AAPL, -2.53%) has now joined a long list of technology companies based in the U.S. that are sending out warnings regarding the impact of tougher regulations in Europe which are expected to have negative long-term business implications. In a filing this week, Apple warned that the company’s operating results, cash flow and earnings could be impacted by an ongoing tax probe in Ireland. In June last year, the European Commission opened an investigation in order to determine whether Ireland had given the iPhone maker’s subsidiaries an unfair corporate tax advantage. Other companies under the commissions spotlight include Starbucks Corp. (SBUX, -1.57%) and Fiat. While Apple has been quite adamant that the investigation is ‘without merit’, if an unfavorable ruling is reached, it will mean that Ireland will need to recover taxes from the last ten years. Should this happen, Apple has stated that the amount “could be material” yet the Cupertino-based company has not provided specifics regarding the exact amounts. Meanwhile, earlier this month, Google Inc. (GOOGL, -1.93%) also had to face the music after officials in the European Union charged the internet search giant with violating the region’s antitrust laws. According to Youssef Squali, an analyst at Cantor Fitzgerald, Google could be strongly impacted if a negative verdict is reached.

STOCK.com   Indices

On Thursday, U.S. stocks faced selling pressure. This came a day after the Federal Reserve left the timing of interest rate hikes open while Thursday saw the release of mixed earnings reports as well as a number of economic releases. These economic releases pointed to inflation stabilization as well as an improvement in the labor market which are both key gauges of the health of the economy in the U.S. According to the data released, in the 7 days from the 19th to the 25th of April, the total number of people who applied for unemployment benefits in the U.S. declined to 262,000, down 34,000. This marked the lowest level in the last 15 years. It is this type of data that the central bank has said it would use as a guide in order to determine the exact timing of interest rate hikes. At the close of trading, the Dow Jones Industrial Average (DJIA) dropped 0.7%, or 123 points, at to 17,914.82. Also declining was the S&P 500 index (SPX) which dropped 0.7%, or 15 points, to 2,092.22. The biggest losers on the benchmark index were tech and utilities stocks. Meanwhile, the Nasdaq Composite index (COMP) was also down about 1%, or 50 points, at 4,973.75.

STOCK.com   Currencies

In currency trading on Thursday, the U.S. dollar (USD) traded broadly lower. This decline came as a result of the Federal Reserve statement which weighed on the greenback while positive economic reports out of the U.S. did little for the currency. In their report, the Department of Labor stated that for the week ending on the 25th of April, the number of individuals applying for initial jobless benefits declined to a 15-year low of 262,000, down 34,000. This beat analyst expectations for a decline to 290,000 last week, down 6,000. In a separate report, the Commerce Department reported that personal spending in the U.S. increased in April by 0.4 percent. This missed expectations for a gain of 0.5%. The EUR/USD traded at 1.1173, up 0.40% while the GBP/USD traded at 1.5337, down 0.66 percent. The greenback also traded mixed with the Swiss franc and the yen with USD/CHF steady at 0.9389 and with USD/JPY up 0.37 percent and trading at 119.46. Also, the U.S. dollar index was at 95.17, down 0.13 percent.

STOCK.com   Commodities

On Friday, in early morning trading in Asia, crude oil traded slightly lower. This decline came despite a small uptick in the official manufacturing gauge of China. WTI crude oil for delivery in June traded at $59.57 a barrel, down 0.10%. Overnight on Thursday, crude futures climbed ending the month of April on the upside. This came in response to data released on Wednesday regarding the weekly buildup in the U.S. while the supply from OPEC reached its highest level in more than 2 years. Meanwhile on Thursday, Brent crude oil for delivery in June traded at $66.66 a barrel, up 1.25%, or 0.82, on the Intercontinental Exchange (ICE).

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