On Thursday, Goldman Sachs will report their first quarter earnings. The main focus will be on the investment bank’s fixed income division. In the last quarter of 2014, Goldman reported weak earnings which showed a decline in net income of 7.1%. Despite this, the bank did post an increase in net earnings over the year of a 5.4 percent. Also, as a result of inactivity in the bond market, Goldman Sachs reported a 29% decline in revenue in the last quarter. According to analysts polled by Thomson Financial, Goldman is forecast to report earnings of $4.26 a share for the first quarter which will be up from $4.03 a share a year earlier. Added to this, Goldman is expected to report revenue of $9.35 billion, up compared to last year’s revenue of $9.33 billion. To date, the bank has not offered a forecast for its 1st quarter results. On Tuesday, J.P. Morgan Chase & Co. reported a gain in trading revenue which was up 9 percent so all eyes are on the results of Goldman Sachs which will set the overall tone for the quarter. Currently, investment banks are bullish on Goldman Sachs. That is, out of the thirty two ratings, 3 are sells, 10 are buys and nineteen are holds. Also, the average target price is $198.87 which is 1.7 percent above the current price.
On Wednesday, U.S. stocks gained and as a result, the main benchmark indices were pushed to record levels. This increase came in response to gains in oil prices while better than expected earnings also boosted investor sentiment. The rally was led by small cap stocks and as a result, the Russell 2000 index closed at a new record. At the close of trading, the Dow Jones Industrial Average (DJIA) advanced 0.4 percent, or 75.71 points, t0 18,112.41. More than two thirds of the blue chip index’s components finished with gains. Meanwhile, the Nasdaq Composite (COMP) index rose 0.7%, or 33.73 points, to 5,011.02 while the S&P 500 index (SPX) closed up 0.5%, or 10.78 points, at 2,106.62. This benchmark index is now within striking distance from the record level reached last month. The biggest gains were among energy stocks which rallied more than 2 percent. This came after crude oil prices gained almost 6 percent to settle at their highest level so far this year.
On Wednesday, the U.S. dollar (USD) traded lower. This came after data showed that in New York area, manufacturing conditions unexpectedly contracted in April while industrial production in the U.S. declined more than expected in March. According to a report by the Federal Reserve Bank of New York, their general business conditions index decreased from 6.9 in March to -1.2 in April. This missed analysts’ expectations for the index to inch up to 7.0 in April. Also, data showed that industrial production in the U.S declined in March by 0.6% while in February, industrial production rose by 0.1 percent. In forex trading, the EUR/USD traded at 1.0633, down 0.22%. This came after Mario Draghi, the ECB (European Central Bank) President, played down speculation that as a result of recent signs of a recovery in the euro zone economy, the bank could start to scale back its buying program. Also, the British pound was steady with GBP/USD at 1.4784 while the USD/JPY traded at 119.30, down 0.08%. The U.S. dollar index was at 99.21, up 0.20 percent.
On Thursday, in Asian trading, crude oil prices eased in early trade. This came after profit taking as a result of a strong overnight performance which was linked to the supply data out of the U.S. Overnight, WTI crude oil futures rose to their highest levels and on Thursday, crude oil for delivery declined and traded at $56.05 a barrel, down 0.59% on the NYMEX. According to the weekly report from the EIA (Energy Information Administration), crude oil inventories rose by 1.3 million barrels in the week ended 10 April. As of last week, total crude oil inventories in the country stood at 483.7 million barrels. Meanwhile on Wednesday, Brent crude oil for delivery in June traded at $61.07 a barrel, up 2.12%, on the ICE Futures Exchange in London.