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DAILY MARKET REVIEW: 09 FEBRUARY 2015

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Daily Market Review on STOCK.com

DAILY MARKET REVIEW: 09 FEBRUARY 2015

Feb 09 2015, 08.35am GMT

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STOCK.com   Indices

Despite a strong jobs report, U.S. stocks finished lower on Friday in response to concerns regarding the future of Greece. This came after Standard & Poor downgraded Greece’s long term sovereign-debt rating from B to B-minus. Also, according to an official in the euro zone, Greece has been given a deadline until the 16th of February to apply for an extension of its bailout program. Meanwhile on Friday, the U.S. Labor Department said that the country had added 257,000 jobs in January. This was above expectations for an increase of only 234,000. Data also showed that the unemployment rate in the U.S. moved from 5.6 percent in December to 5.7 percent in January. The report also showed that the average hourly earnings in the U.S. in January rose 0.5 percent which exceeded expectations for a gain of only 0.3 percent after declining 0.2% in December. At the close of trading in the U.S., the Nasdaq Composite index (COMP) declined 0.4%, or 20.70 points, to 4,744.40 and this index added 2.4 percent for the week and is up 0.2% in 2015 to date. Also, the S&P 500 index (SPX) fell 0.3%, or 7.05 points, at 2,055.47, leaving the benchmark index up 3 percent for the week yet down 0.2 percent for the year. Meanwhile, the Dow Jones Industrial Average (DJIA) fell 0.3%, or 60.59 points, to close at 17,824.29. This blue-chip barometer was up 3.8 percent for the week and flat for the year.

STOCK.com   Currencies

On Monday, in Asian trading, the Japanese yen (JPY) traded higher. This came after Japan reported disappointing currency account data for January which showed a deficit of ¥187 billion. Analysts were expecting a surplus of ¥358 billion. Meanwhile, China reported a decline in exports in January by 3.2 percent while imports declined by 19.7 percent. The USD/JPY traded down 0.17 percent at 118.92 while the EUR/USD traded down 0.02 percent at 1.1314. Meanwhile, the Governor of the Reserve Bank of Australia, Glenn Stevens, said that the financial system and Australian companies should be prepared for a vast increase in the use of Chinese yuan for trade. The AUD/USD traded down 0.46% at 0.7752. Last week, the U.S. dollar traded higher against most major currencies in response to the positive employment report released on Friday. The U.S. dollar index was at 94.82, down 0.02 percent.

STOCK.com   Stocks

On Friday last week, the analysts at Barclays cut their price target on the stock of Tesla Motors Inc. from $220 to $200. According to analysts, this cut is a better reflection of the company’s ability to become a mass-market car maker in the future. A cut was also provided by analysts for estimates on Tesla’s car deliveries in 2020 from 426,000 cars to 370,000 despite the company’s own guidance of 500,000 cars which it hopes to achieve with the help of its planned $35,000 Tesla Model 3 which is due out in 2017. The overweight rating on the Tesla stock was maintained and analysts are expecting positive earnings when the company reports after the market closes on Wednesday, 11 February 2015. This earnings report will be for the fiscal quarter ending December 2014 and analysts expect Tesla to report earnings per share for the quarter of $0.31 compared to $0.33 a year earlier. The company is also expected to report revenue in the fourth quarter of $1.23 billion which is up from $761.3 million in the same quarter the previous year. An increase in net profit is also expected from $45.9 million to $46.1 million. Tesla is currently trading at $217.36 a share.

STOCK.com   Commodities

In Asian trading on Monday, crude oil prices gained. This came after data out of China showed a decline in exports and imports which might prompt the country to ease their monetary policy further. Crude oil for March delivery traded at $52.68 a barrel, up 1.03 percent on the NYMEX. Meanwhile on Friday last week, crude oil futures advanced by more than $1 for the week. New York-traded oil futures advanced 7.15 percent or $4.10, marking the 2nd straight weekly gain for the commodity as well as the biggest advance since February 2011. Despite this, NYMEX oil prices are still down almost 52 percent since it hit $107.50 a barrel in June last year.

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