On Wednesday, Alcoa, Inc. (NYSE:AA) kicked off the first quarter earnings season. In after-hours trading, the shares of the aluminium giant declined more than 3 percent, or $0.44, to trade at $13.24, as Alcoa failed to reach projections. As the 3rd largest producer of aluminium in the world, Alcoa posted revenue of $5.82 billion which marked a 6.7% increase on a year-over-year basis. This missed forecasts for revenue of $5.94 billion. Also, Alcoa reported net income of $195 million or 14 cents a share compared to a year-earlier loss of $178 million, or 16 cents a share. Alcoa attributed their earnings results to the completion of the acquisition of TITAL for $204 million. Expectations are that this new acquisition will help to expand the sales of aluminium and titanium structural casings for aerospace in Europe. Alcoa also mentioned the company’s interest in purchasing RTI International Metals in order to boost its titanium offerings. In the first quarter, on the London Metal Exchange, aluminium prices averaged around $1,800 per ton which was up from about $1,700 a ton over the first quarter of 2014.
All eyes were on the Federal Reserve yesterday for the release of the Fed’s March FOMC meeting minutes. In volatile trading on Wednesday, U.S. stocks gained while several Federal Reserve officials seemed to support a June rate hike. It is important to note that the meeting minutes from March do not reflect a variety of recent economic reports such as the jobs report data released last Friday which signaled softness in the U.S. economy. Also, ahead of the release of the minutes, William Dudley, the New York Fed President, suggested that as a result of the recent signs of economic weakness, the bar for raising rates in June is high. Staying in positive territory for the session, the Nasdaq Composite Index (COMP) rose 0.8%, or 40.59 points, to 4,950.82. Also on the upside was the Dow Jones Industrial Average (DJIA) which finished up 0.2%, or 27.09 points, at 17,902.52. This blue chip index was up over 100 points before the minutes but then declined 53 points after the minutes. Meanwhile, the S&P 500 index (SPX) advanced 0.3%, or 5.57 points, to 2,081.90 with 7 of its 10 sectors closing higher.
In forex trading on Wednesday, the U.S. dollar (USD) gained after the release of the Fed’s FOMC meeting minutes. The euro declined slightly after the minutes, which is an indication that the central bank could be placing more emphasis on the strength of the volatile USD rather than the timing of interest rate hikes. The EUR/USD hit a session low of $1.0763, down almost 0.5% against the greenback and the pair last traded at $1.07881, down 0.3 percent. Meanwhile, against the Japanese yen, the USD traded higher following the Fed release. Ahead of the release, USD/JPY traded at 119.82. On Monday, the currency pair moved above the 1.10 level for the first time since March 25. Over the last few months, the U.S. dollar has strengthened. This has come as a result of the performance of the U.S. economy against the rest of the world as well as the anticipation of a tighter U.S. policy. While other countries are talking about easing, the Fed has been the only central bank globally which is talking about tightening policy. Also, the dollar index rose to 98.03, up 0.22%, after trading down at 97.80 for the day.
In commodity trading in Asia on Thursday, crude oil prices rebounded. This increase came despite the fact that stockpile levels and global production continue to send bearish signals to the market. WTI crude for delivery in May traded at $50.97 a barrel, up 1.08 percent, on the NYMEX. Meanwhile, overnight, WTI crude oil futures declined more than 6 percent on Wednesday after data showed that inventories rose by its highest weekly level in more than 13 years. In their report, the EIA (Energy Information Administration) said that for the week ending on the 3rd of April, crude oil storage in the U.S. increased by 10.95 million barrels. This was more than triple than the expected count of 3.28 million and it also represents the largest weekly buildup since 2001. Also, on Wednesday, Brent crude for May delivery traded at $55.65 a barrel, down $3.46, or more than 5 percent, on the Intercontinental Exchange (ICE).