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DAILY MARKET REVIEW: 07 APRIL 2015

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Daily Market Review on STOCK.com

DAILY MARKET REVIEW: 07 APRIL 2015

Apr 07 2015, 08.18am GMT

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STOCK.com   Stocks

Things aren’t looking good for Samsung Electronics Co. and on Tuesday, the South Korean technology giant reported that they expect another decline in operating profits in the first quarter. This comes as a result of declining sales in the company’s key mobile unit. According to Samsung, the operating profit for the first 3 months of this year declined to $5.4 billion. This is down approximately 30.5 percent compared to last year. Added to this, Samsung’s estimates follow a decline of 37 percent year over year in the fourth quarter and a 60 percent decline in the 3rd-quarter last year. The forecast by Samsung is slightly better than the forecast provided by 8 analysts of a Dow Jones survey. According to these analysts, Samsung is likely to see an average decline of 35% in operating profits. Last year, the sales of the Galaxy S5 smartphone declined rapidly. As a result of this, Samsung shifted away from the number one spot in the smartphone market globally. The tech giant is slowly being pushed out by the increased popularity of the new iPhones by Apple Inc. as well as other cheaper Chinese brands. Meanwhile, Samsung also said that their revenue is also likely to decline in the first quarter to $43.3 billion, down 12.4 percent.

STOCK.com   Indices

After being closed for the Easter holidays, U.S. markets managed to erase early losses and they finished Monday’s trading session with solid gains. Added to this, the Dow industrials rose by almost 120 points. This increase came as investor sentiment shifted regarding the timing of the rate increase by the U.S. Federal Reserve especially after such a disappointing jobs report was released last Friday. The Dow Jones Industrial Average (DJIA) advanced 0.7%, or 117.61 points, to close at 17,880.85. This came after the blue chip index declined by more than 100 points in early trading. Also on the upside was the Nasdaq Composite index (COMP) which increased 0.6%, or 30.38 points, at 4,917.32 while the S&P 500 index (SPX) rose 0.7%, or 13.66 points, to end at 2,080.62. Energy stocks were the best performers on the index as crude oil prices increased. For the year, the SPX is up 1.1 percent and it also stands only 1.7 percent off its record close reached on the 2nd of March.

STOCK.com   Currencies

In forex trading, the euro (EUR) saw volatility on Monday. During the North American session, the single currency traded above $1.10. In mid-afternoon trade however, the EUR declined abruptly but still remained higher on the day. In recent trade, the EUR/USD traded at $1.0939 while on Friday, the currency pair traded at $1.0895. In morning trade, the currency pair hit a session high of $1.1048. The EUR was pushed higher by traders after William Dudley, the New York Federal Reserve President, said that the strong greenback has given the U.S. economy a ‘significant shock’ while data from the Institute for Supply Management on their nonmanufacturing index showed declining growth in the U.S. service sector. At about 3:05 p.m. Eastern Time, the EUR suddenly declined shedding almost 65 pips in fifteen minutes. At the same time, the euro also declined against the British pound (GBP) and the Japanese yen. In trading on Monday, EUR/GBP traded at 73.46 pence while on Friday, the currency pair traded at 73.02 pence. In other currency news, the USD/JPY traded at ¥119.46 compared with ¥118.93 in late trading on Friday in New York. Also, the US Dollar Index was up 0.03 percent at 97.24.

STOCK.com   Commodities

On Tuesday in Asian trading, crude oil prices declined. This came after Goldman Sachs (NYSE:GS) stated that in the coming months, crude oil prices need to remain low in order to achieve a slowdown in production growth in the U.S. In an overnight note, Goldman said that it has a forecast of $40 a barrel over the next 3 months. By 0017 GMT, Brent crude oil for delivery in May traded at $57.65 a barrel, down almost half a dollar. Meanwhile, U.S. crude oil for delivery in May traded at $51.76 a barrel, down 39 cents. On Monday, crude oil prices gained more than 5%. This increase came as investors reassessed how quickly exports will be increased by Iran after a preliminary nuclear deal had been signed with Western powers.

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