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Daily Market Review – 29 June 2015

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Daily Market Review – 29 June 2015

Jun 29 2015, 09.30am GMT



Date of PayPal Spinoff Announced by eBay


The 20th of July marks the day that PayPal will split away from eBay (EBAY) and will start to operate as a separate company. All eBay shareholders will also receive a share of PayPal for every share they owned on eBay. PayPal will tentatively trade under the ticker symbol ‘PYPL’. In 2002, eBay acquired PayPal for $1.5 billion and the goal at the time was to push eBay customers into using PayPal in order to boost these transactions. Beyond this function of pushing traffic to PayPal, eBay has not yet realized any other benefits from this merger. With the expected split about to take place next month, analysts believe that PayPal is expected to flourish on its own when it hits the market. In September last year, eBay announced the split and as a result, its shares surged 7% which marked the biggest climb in years. With PayPal now operating as a separate company, they will now be able to focus exclusively on payments. In their Friday announcement, eBay stated that as of last year, PayPal has seen about 162 million users and in 2015 so far, the total payment volume for the year has increased to $235 billion, up 26%. Meanwhile, Carl Icahn, the activist investor must be smiling since he has been pushing for a split between the 2 companies since eBay reported poor earnings in January. Also, in March this year, Icahn recommended the selloff of 20% of PayPal via an IPO (Initial public offering). After the 20th of July, John Donahoe, who is currently the CEO of eBay, will step down and will then join either one or both of the boards of the two new companies. Donahoe has been serving as the eBay CEO since 2008. The shares of eBay are currently trading at $61.04 a share.

STOCK.com   Indices

On Friday, U.S. stocks ended lower and the main indices also posted weekly losses. This came in response to the negotiations between Greece and its lenders which failed to produce a decisive agreement. Despite the declines, the Dow Jones Industrial Average (DJIA) was boosted by a surge in Nike Inc. (NKE, +4.27%) shares which advanced more than 4 percent as a result of positive earnings. This advance made up over 50% of the gains made by the Dow on Friday. The blue chip index advanced 0.3%, or 57.12 points, to 17,947.48. For the week, the index declined 0.4%. Meanwhile, the Nasdaq Composite index (COMP) declined 0.6%, or 31.68 points, to 5,110, dropping 0.7% over the week. Also, the S&P 500 index (SPX) declined by less than a point to close on Friday at 2,101.50. For the week, the benchmark index declined 0.4 percent.

STOCK.com   Currencies.

In forex trading on Friday, the U.S. dollar traded higher. This advance came in response to data which showed that consumer sentiment in the U.S. improved unexpectedly in June. As a result, optimism over the strength of the economy was boosted. According to the report by the University of Michigan on Friday, the consumer sentiment index rose from 94.6 in May to a 5-month high of 96.1 in June. This beat expectations for an unchanged reading. Meanwhile, the University also reported that its inflation expectations for the next 12 months remained unchanged at 2.7 percent in June. The EUR/USD traded at 1.1180, down 0.21% while the GBP/USD held steady at 1.5748. Against the Canadian dollar, Japanese yen and the Swiss franc, the greenback traded mixed with the USD/CAD at 1.2361, up 0.30%, the USD/JPY at 123.87, up 0.19% and with the USD/CHF at 0.9327, down 0.40 percent. Also, the U.S. dollar index was at 95.57, up 0.21%.

STOCK.com   Commodities

On Monday, crude oil prices declined sharply in early Asian trade. This came in response to the failure of talks regarding the Greece financial crisis as well as rate cuts by China over the weekend. WTI crude oil for delivery in August traded at $58.84 a barrel, down 1.32%, on the NYMEX. Over the weekend, the People's Bank of China cut its deposit rate to 4.85 percent and its interest rates to 2 percent from Sunday. Also, last week on Friday, Brent crude oil for delivery in August traded at $63.26 a barrel, up 0.09%, or 6 cents, on the ICE Futures Exchange in London. During the session, Brent declined to a session low of $62.50 a barrel which marked the lowest level since the 22nd of June. For the week, Brent futures, which are London traded, added on 0.38%, or 69 cents.

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