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Daily Market Review – 06 March 2015

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Daily Market Review – 06 March 2015

March 6 2015, 8.10am GMT

STOCK.com

Volkswagen to Invest $1 Billion in Mexico

 

STOCK.com   Stocks

Next week, the German carmaker Volkswagen (DE:VOWG_p) will make an announcement regarding a $1 billion investment. This investment will be made to expand the company’s Puebla plant in Mexico. The reason for this deal is for the production of the Volkswagen’s Tiguan compact car. The investment deal will be unveiled on Monday and it will provide almost two thousand jobs. As of the end of 2014, the total investment in the Mexican auto sector had reached $19 billion. According to the government, these investments have been under President Enrique Pena Nieto who took office 2 years ago. In 1964, Volkswagen opened its Puebla plant and according to data from the Mexican Automotive Industry Association (AMIA) show, out of the 3.2 million autos that were produced in the country, 475,121 vehicles came out of the Volkswagen plant. According to AMIA, Mexico is the 4th largest exporter in the world and the 7th biggest manufacturer of autos with more than 80% of these vehicles shipped for sales abroad. In 2014, total auto production increased by 27% compared to 2013. According to AMIA, Mexico is likely to produce more than five million vehicles by 2020. The shares of Volkswagen are currently trading at €225.65 a share.

STOCK.com   Indices

In U.S. trading on Thursday, stocks moved between small gains and losses as investors turned their attention to the closely watched jobs report due out today. On Thursday it was also announced that the European Central Bank will start its trillion-dollar plan to purchase government bonds and other debt on Monday. This announcement had little impact on the markets as investors remain skeptical about the bank’s ability to effectively execute on the plan. During the trading session, the S&P 500 index dipped briefly into the red, but recovered, with 6 of its 10 main sectors trading higher. The SPX closed 0.1%, or 2.53 points, higher at 2,101.06 with financials and utilities leading the gains. On the upside was the Dow Jones Industrial Average (DJIA) with two-thirds of its components in the green. The blue chip index ended 0.2%, or 38.82 points, higher at 18,135.72. Moving away from the psychologically significant 5,000 level, the Nasdaq Composite index (COMP) also advanced and ended the day up 0.3 percent, or 15.67 points, at 4,982.81.

STOCK.com   Currencies

In forex trading on Thursday, the U.S. dollar (USD) continued to trade higher despite the release of poor jobless claims and factory orders data in the U.S. This comes as investors shift their focus to the U.S. nonfarm payrolls report due out on Friday. According to the Department of Labor in the U.S., the number of individuals filing for initial jobless benefits in the week ending 28 February increased to 320,000, up 7,000. This is up from last week’s total of 313,000 and it missed analysts’ expectations for a decline in the initial jobless claims by 18,000 to 295,000 last week. Separately, in the report by the Bureau of Labor Statistics in the U.S., the non-farm business sector labor productivity decreased by 2.2 percent in the final quarter of 2014. This beat expectations for a 2.3 percent decline. The EUR/USD traded at 1.1045, down 0.30 percent while the USD traded higher against the Japanese yen and the franc with USD/JPY up 0.30 percent at 120.06 and with USD/CHF trading at 0.9684, up 0.52%. Against the British pound, the greenback traded higher with GBP/USD down 0.18% to trade at 1.5237.

STOCK.com   Commodities

Crude oil prices have been on an upward trend and on Friday in Asian trading, this trend continued. This increase came from forecasts that global demand for the commodity may use up the surplus supplies of crude oil as central banks round the globe spur easy policies in order to boost growth. On the New York Mercantile Exchange, WTI crude oil for April delivery traded at $51.09 a barrel, up 0.64%. Meanwhile on Thursday, Brent crude oil for delivery in April traded at $61.21 a barrel. The spread between WTI and Brent is currently hovering around $10 a barrel.

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