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Daily Market Review – 31 July 2015

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Daily Market Review – 31 July 2015

Jul 31 2015, 07.00am GMT



Nokia Beats Earnings Expectations


STOCK.com   Stocks

On Thursday, Nokia Corp. reported better than expected earnings for the second quarter. This came as a result of an increase in software sales which helped to offset the challenging market conditions. Nokia, which is a Finnish company, reported that for the 3 months through to June, profits came in at EUR347 million. According to a poll by financial data provider SME Direkt, this beat analysts’ expectations for profits of EUR209 million. In addition, in the second quarter of last year, Nokia had reported a net profit of EUR2.51 billion. At the time, this was pushed up by a gain of EUR3.2 billion which came as a result of the sale of its handset business to Microsoft in April last year. If we exclude the gains that Nokia made from the sale of its handset unit as well as the losses incurred as a result of the discontinued operations, for the 2nd quarter of 2014, Nokia's net loss was EUR28 million. Meanwhile, Nokia also reported quarterly revenue of EUR3.21 billion which was up from the EUR2.94 billion reported a year ago. In addition, the operating profit reported was also higher than the EUR284 million reported last year with operating profits for the 2nd quarter of 2015 at EUR508 million. Also on the upside was Nokia’s underlying operating profit margin at the company’s networks unit which increased to 11.5% in the 2nd quarter. This was up from the 3.2 percent reported in the 1st quarter while it was at 11% in the second quarter over the same period a year ago. Nokia is also is currently working on acquiring Alcatel-Lucent, in a deal valued at $17.14 billion and the company is currently trading at $6.42 a share.

STOCK.com   Indices

On Thursday, U.S. stocks closed little changed from the trading session on Wednesday. This came after a volatile trading session while data also showed that the economy picked up its pace in the second quarter. As a result, this prompted the sentiment that the Federal Reserve remains on track to raise interest rates as soon as September this year. Gross domestic product (GDP) data showed that the economy in the U.S. in the 2nd quarter expanded at an annualized rate of 2.3 percent. Meanwhile, the growth for the first quarter was increased from negative 0.2% to 0.6%. During the trading session, the Dow Jones Industrial Average (DJIA) declined by more than 100 points but the blue chip index then finished down only 5.41 points at 17,745.98. Also, the tech heavy Nasdaq Composite index (COMP) rose 0.3%, or 17.05 points, to 5,128.78 while the S&P 500 index (SPX) ended the trading session flat at 2,108.66. The biggest gains were seen in the materials and utilities sectors while declines were evident in the consumer staples and energy sectors.

STOCK.com   Currencies.

On Thursday, the U.S. dollar (USD) extended gains. This came after data showed that the growth in the U.S. economy increased in the second quarter which boosted expectations for a rate hike later this year. According to the Commerce Department, the U.S. GDP expanded at an annual rate of 2.3% in the three months to June. In addition, the growth in the 1st quarter was revised up to 0.6% from a previously reported contraction of 0.2%. In a separate report, the Department of Labor stated that the number of people filing for initial jobless benefits in the week ending on the 25th of July increased to 267,000 up by 12,000. Last week’s total was at 255,000. The EUR/USD traded at 1.0922, down 0.56 percent while the USD/JPY traded at 124.39, up 0.37%. Against the Canadian dollar, the British pound and the Australian dollar, the U.S. dollar traded higher with the USD/CAD up 0.63% at 1.3026, the GBP/USD steady at 1.5608 and with the AUD/USD down 0.21% and trading at 0.7280. Also, the U.S. dollar index was at 97.70, up 0.49%.

STOCK.com   Commodities

In Asian trading on Friday, crude oil prices held steady to lower. This comes as the market now shifts their attention to the data from oil services firm Baker Hughes out of the U.S. (NYSE:BHI) for further indications on the balance of the supply and demand. Last week, the firm said the total number of U.S. oil rigs increased by 21 to 659. WTI crude oil for delivery in September traded at $48.51 a barrel, down 0.03 percent on the NYMEX. Also, on Thursday, Brent crude oil for September delivery traded at $53.42, up 0.12%, or $0.05, on the Intercontinental Exchange (ICE) in London. Over the last 30 days, the value of Brent futures has declined by approximately 15 percent.

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