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Daily Market Review – 19 May 2015

You are here

Daily Market Review – 19 May 2015

May 19 2015, 08.15am GMT



What Can Star Wars Do For Disney?


STOCK.com   Stocks

According to analysts, over the next 6 months, Disney stocks have the potential of being boosted by 25% as a result of the release of the 7th episode in the Star Wars Saga, “Star Wars: The Force Awakens” which is due out on the 18th of December 2015. This is likely only if the S&P 500 index (SPX) also gains at least 6 percent over the same period while other criteria will also come into play. The fact is we have often see stocks for movie studios increase with the release of a major movie. Added to this, the stocks of Walt Disney (DIS) are appealing as an investment since the company is also the most diversified large media company in the industry today. For the 2nd fiscal quarter, Disney recently reported impressive earnings of $2.11 billion compared to $1.92 billion in the same quarter a year earlier. Also, the company reported EPS of $1.23 compared to $1.08 in the same period a year ago. This also beat analyst expectations for EPS of $1.10. To top it off, Disney reported an increase of 7% in revenue from $11.65 billion to $12.46 billion. There was an all-round positive performance by Disney including an increase of 90 % from broadcasting as well as a 24% increase in income from parks. According to analysts, one of the biggest reasons to buy Disney stocks is that they are seen as a safe stock. Also, the right time to buy these stocks will be based on two scenarios. In the first scenario, the SPX need to break above 2125, while the 2nd scenario is if and when Disney closes the gap it created when it reported better than expected earnings in the previous quarter. This means that in this scenario, the buy zone is between 94.00 and 97.00. Disney shares are currently trading at $110.59 a share.

STOCK.com   Indices

On Monday, U.S. stocks finished the trading session higher which also saw the Dow industrials and the S&P 500 reaching new intraday record highs. The Dow Jones Industrial Average (DJIA) closed 0.1%, or 20 points, higher at 18,293 while the S&P 500 index (SPX) gained 0.2%, or 5 points, to 2,128. Following the upward trend was the Nasdaq Composite index (COMP) which also advanced 0.4%, or 20 points, to 5,067. According to analysts at the Bank of America Merrill Lynch, the SPX is likely to continue to build on its recent gains despite the index having a slow start to the year. Since the beginning of 2015, the S&P 500 has increased so far by about 3 percent. Meanwhile, also on Monday, Charles Evans, the Fed Chicago President, maintained his stance that the Federal Reserve should not increase interest rates this year. As a result of economic data released in the first quarter, Evans stated that he would like to see concrete evidence that the economy in the country is indeed strengthening before interest rates are hiked. Investors have now shifted their attention to the minutes of the Federal Open Market Committee meeting from the 29th of April which is due out on Wednesday.

STOCK.com   Currencies.

Monday saw the U.S. dollar (USD) trading higher. This came after the greenback saw sharp losses last week while investors have now shifted their focus to the release of the Fed’s April meeting minutes on Wednesday as well as inflation data out of the U.S. on Friday. The EUR/USD traded at 1.1342, down 0.92% while the GBP/USD also traded at 1.5658, down 0.44%. Against the Canadian dollar and the Japanese yen, the USD traded higher with USD/CAD up 0.97% at 1.2129, while the USD/JPY traded at 119.76, up 0.45%. Meanwhile, the New Zealand and Australian dollars were also weaker with NZD/USD down 1.09% to 0.7392 and with AUD/USD down 0.52% to 0.7996. Also, the U.S. dollar index was at 94.00, up 0.75 percent.

STOCK.com   Commodities

In Asia, in early morning trading on Tuesday, crude oil prices gained. This comes after tensions in Yemen and Iraq escalated overnight as well as ahead of industry data of stockpiles out of the U.S. by the American Petroleum Institute which is expected out today. WTI crude for delivery in July traded at $60.29 a barrel, up 0.07% on the NYMEX. Meanwhile, investors are also waiting for stockpile data from the Department of Energy on Wednesday to get a better indication of the supply and demand of the commodity. On Monday, Brent crude oil for delivery in July traded at $66.30 a barrel, down 0.76%, or 0.51 cents, on the Intercontinental Exchange (ICE).

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