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DAILY MARKET REVIEW: 02 APRIL 2015

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Daily Market Review on STOCK.com

DAILY MARKET REVIEW: 02 APRIL 2015

Apr 02 2015, 07.55am GMT

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STOCK.com   Stocks

Microsoft (MSFT, -0.02%) simply can’t seem to catch a break. In a recent note to clients, Goldman Sachs reiterated a sell rating on the Microsoft stock. Also, a 12 month price target of $38 was provided which translates in to a 6.5 percent decrease from the stock’s most recent trading price. According to Goldman Sachs, over the next three fiscal years, the company faces a variety of pressures to their earning per shares and revenue forecasts. Added to this, the analyst stated that the existing estimates on Microsoft are ‘too aggressive’ and failed to take into consideration the currency headwinds which are having an impact on the shipments of PCs. Weakness in commercial licensing was also cited. In recent trade, the stocks of Microsoft traded at $40.60, down 0.1 percent. This is down since the company hit a 14 year high in November last year when shares were trading at $49.74 per share. What is interesting though is that according to Yahoo Finance, analysts on average think that the shares of Microsoft will reach $46.97 and most analysts have a buy/overweight rating on their stock.

STOCK.com   Indices

There was no fun on April Fools’ Day for U.S. stocks on Wednesday, as the main benchmark indices ended the trading session lower. This came in response to disappointing economic reports which eroded investor confidence. With Asian markets lower, futures pointed lower earlier in the session. Pointing to a weaker U.S. economy, the private-sector job gains came in weaker than expected while the ISM manufacturing index also came in lower than expected. As a result, the Dow Jones Industrial Average (DJIA) fell almost 190 points in early trade and by the close, the blue chip index ended the session down 0.4%, or 77.94 points, at 17,698.18. Meanwhile, the S&P 500 index (SPX) fell 0.4%, or 8.20 points, at 2,059.69. Interestingly, this benchmark index closed below a key technical level. As a result, analysts have forecast that the SPX is now vulnerable to further declines. Also, the Nasdaq Composite index (COMP) ended 0.4%, or 20.66 points, at 4,880.23.

STOCK.com   Currencies

On Wednesday, the U.S. dollar (USD) traded lower. This came after the Institute for Supply Management reported on the same day that its index of purchasing managers fell from 52.9 in February to 51.5 in March. This missed analyst expectations for the manufacturing PMI to decline in March to 52.5. Also, Automatic Data Processing Inc. (ADP) reported that in March, non-farm private employment rose by 189,000. This was below expectations for an increase of 225,000 while in February, the U.S. economy created 214,000 jobs. In currency trading, the EUR/USD traded at 1.0786, up 0.46%, while the British pound shifted off one and a half week lows, with GBP/USD holding steady at 1.4824. Against the Australian dollar, the yen and the Swiss franc, the USD traded lower with AUD/USD up 0.34% at 0.7631, USD/JPY down 0.49% to 119.53 and with USD/CHF down 0.59% to 0.9668. Also, the U.S. dollar index was at 98.46, down 0.24 percent.

STOCK.com   Commodities

On Thursday, in early Asian trade, crude oil prices declined sharply. This comes as investors have now turned their attention to the events in Yemen as well as the possible deal over Iran’s economic sanctions and nuclear program. WTI crude for delivery in May traded at $49.46 a barrel, down 1.26 percent on the NYMEX. Meanwhile on Wednesday, Brent crude for delivery in May surged 4.33% or 2.38 to trade at $57.50 a barrel before sliding back to $57.00 on the Intercontinental Exchange (ICE). All eyes are now on the Iranian deal since a loosening of sanctions on the country could inundate an already saturated global oil market with millions of barrels of Iranian oil. Since sanctions were implemented more than 3 years ago, exports from Iran have been restricted to only 1 million barrels per day.

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