Twitter Surges on Upgrade
On Monday, in premarket trade, the shares of Twitter Inc. (TWTR, +4.84%) advanced 2.8 percent. This came after the social-networking company was upgraded by SunTrust Robinson Humphrey. According to analyst Robert Peck, Twitter displays a wide series of potential positive catalysts in addition to a "washed out" valuation. Peck also stated that the latest monetization efforts which have been implemented by Twitter as well as those the company will implement in the future are likely to boost the company’s revenue. These include efforts such as buy button ads, the Doubleclick partnership, the launch of the Twitter audience platform as well as video ads. In addition, new partnerships and initiatives are likely to boost the user numbers and engagement. These include the Project Lightening, as well as Google desktop and mobile search results. In a note to clients, Peck stated that while Twitter has seen a lot of volatility since its IPO, with stock prices at a low level, this provides an excellent buying opportunity for investors. Over the last 3 months, the stock of Twitter has declined 27%. In comparison, the S&P 500 index (SPX) has declined 5.6% over the same period. Interestingly, Twitter shares have advanced 10% since the company recorded a low of $24.38 a share last Tuesday. Twitter shares are currently trading at $27.87 each.
In U.S. trading on Monday, U.S. stocks were supported as a result of an increase in oil prices. Despite this support, the main indices remained under pressure as a result of negative investor sentiment regarding the slowdown in China as well as the possibility that the Federal Reserve might increase interest rates as early as next month. By the end of the trading session, the main indices were on track to end the month of August by approximately 6 percent. In addition, the S&P 500 index (SPX) declined 0.3%, or 7 points, to 1,982. Gains were led by the energy sector while 8 of the index’s 10 main sectors traded lower. Also on the downside was the Dow Jones Industrial Average (DJIA) which dropped 0.3%, or 43 points, to 16,598.85. All 30 of the blue chip index’s components traded lower. Following the downward trend was the tech heavy Nasdaq Composite index (COMP) which fell 0.2%, or 11 points, to 4,817.
In currency trading on Monday, the U.S. dollar (USD) pared losses. This came even after economic data was released which showed that the manufacturing activity in the Chicago-area expanded at a slower pace than expected in August. According to Kingsbury International, a market research company, its Chicago PMI (purchasing managers’ index) declined from a reading of 54.7 in July to a reading of 54.4 in August, down 0.3 points. This missed analysts’ expectations for the index to hold steady at 54.7 in August. The EUR/USD traded at 1.211, up 0.21% while the USD/JPY traded at 121.24, down 0.38%. Against the currencies in Switzerland, Australia and Britain, the U.S. dollar traded mixed with the USD/CHF up 0.47% at 0.9671, the AUD/USD down 0.89% at 0.7102 while the GBP/USD declined 0.13% to trade at 1.5379. Also, the U.S. dollar index held steady at 95.98.
On Monday, crude oil futures gave back some of massive gains seen from last week. This came as investors cashed out of the market after crude oil prices made their biggest 2-day percentage gain last week since 2009. Brent crude oil for delivery in October traded at $48.37 a barrel, down 3.37%, or $1.69, on the ICE Futures Exchange in London. On Friday last week, Brent futures rallied to $50.98 a barrel. This marked the commodity’s strongest level since the 11th of August. The contract then closed at $50.05 a barrel on Friday, up 5.24%, or $2.49. Elsewhere, WTI crude oil for delivery in October traded at $43.88 a barrel, down 2.96%, or $1.34 on the New York Mercantile Exchange on Monday.