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DAILY MARKET REVIEW – 16 January 2015

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DAILY MARKET REVIEW – 16 January 2015

Jan 16 2015, 8.10am GMT


Intel & Goldman Sachs in Earnings Spotlight



Intel Corp. (INTC, -0.44%) and Goldman Sachs Group Inc. (GS, -0.97%) are among the companies whose shares are expected to see active trade in Friday’s session. On Thursday, after the closing bell, Intel reported record fourth-quarter revenue which matched Wall Street expectations. The company also indicated that first-quarter sales could be slightly lower at $13.7 billion, compared to analyst consensus of $13.8 billion. For the fourth quarter, Intel reported sales of $14.7 billion. This marked an improvement of 6% year-over-year, from $13.8 billion a year ago. The company also posted net income of 74 cents a share, or $3.7 billion, compared with 51 cents, or $2.6 billion, in the year-earlier period. In after hour trade, the shares of Intel fell to $35.44, down 2.5%. Meanwhile on Friday, according to analysts, Goldman Sachs is projected to report fourth-quarter earnings of $4.32 a share so watch out for this release.


On Thursday, the U.S. stock market finished the session lower. The volatile trading session marked the 5th straight session of losses which was impacted by a move by the Swiss National Bank to cut its currency cap with the euro (EUR) which stunned investors. Wall Street is now bracing for shock waves from the Swiss franc (CHF) move. Adding to the negative sentiment, data on Thursday was mixed and contributed very little to boost confidence about the pace of economic growth. Producer prices posted the biggest decline in December over the last 3 years while jobless claims data was above the 300,000 level which marked the highest level since September 2014. Also, the Philly Fed and Empire State manufacturing indexes both showed an industrial sector in the Northeast growing at a moderate rate. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) was down 0.6% at 17,320.71 while the S&P 500 index (SPX) also declined 0.9% at 1,992.70. Following the downward trend was the Nasdaq Composite index (COMP) which dropped 1.5%, to 4,570.82 in response to its biggest component Apple Inc. (AAPL) declining 2.7 percent.


On Thursday, the Swiss franc (CHF) remained sharply higher against the euro (EUR) and the dollar (USD). This came after the Swiss National Bank (SNB) scrapped the 1.20 per euro exchange rate floor which it imposed four years ago in September 2011. This move was done in a bid to stave off deflation and to prevent the continued appreciation of the safe-haven franc. Adding to this, the SNB also cut rates from minus 0.25% to minus 0.75 percent and they also lowered their target range for the three-month Libor from minus 0.75% to minus 1.25%. Following the announcement, the EUR/CHF currency pair hit lows of 0.7710 and then pulled back to 1.0472, down 12.74 percent. Meanwhile, the euro also traded lower against the greenback and the EUR/USD traded at 1.1623, down 1.4 percent while the USD/CHF traded at 0.8982, down 11.79%. Also, the U.S. dollar index was at 92.68, up 0.40%, supported by weakness in the euro.


On Friday, gold prices eased in Asian trading. This came in response to a shifting sentiment on the U.S. dollar (USD) as well as the timing for a rate hike by the Federal Reserve expected later this year. Gold futures for February delivery traded at $1,262.30 a troy ounce, down 0.20 percent, on the Comex division of the NYME. Meanwhile, silver futures for March delivery on the Comex also traded down at $17.072 a troy ounce, down 0.18% while copper for March slumped to trade at $2.544 a pound, down 1.33 percent. Overnight, following the announcement by the Swiss National Bank to lower interest rates further into negative territory as well as mixed U.S. data, the precious yellow metal held on to gains to trade near a 4-month high. 

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