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DAILY MARKET REVIEW: 22 JANUARY 2015

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Daily Market Review on STOCK.com

DAILY MARKET REVIEW: 22 JANUARY 2015

Jan 22 2015, 08.08am GMT

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STOCK.com   Indices

On Wednesday, U.S. stocks ended higher after a volatile trading session, marking a three day winning streak for the indices. This came in response to investor expectations that the European Central Bank (ECB) will deliver on monetary stimulus at its key meeting which will take place today. The ECB is currently considering a bond-buying program of about €50 billion a month in order to help revive the eurozone economy. Stocks got an added boost from a surprise rate cut by the Bank of Canada as well as increasing oil prices. Meanwhile, markets seemed to be little influenced by the State of the Union address by President Barack Obama as well as better-than-expected housing starts data. According to data released on Wednesday, new constructions in the U.S. rose by 4.4 percent in December, specifically in single-family homes. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) advanced 0.2%, or 39.05 points, to 17,554.28 while the Nasdaq Composite index (COMP) also gained 0.3%, or 12.58 points, to 4,667.42. Also on the upside and led by gains in energy sector stocks, the S&P 500 index (SPX) closed 0.5%, or 9.58 points, higher at 2,032.13.

STOCK.com   Currencies

On Wednesday, the U.S. dollar (USD) rose to 6-year highs against the Canadian dollar (CAD). This came in response to a surprise rate cut by the Bank of Canada (BoC) by 25 basis points in response to the declining oil prices. The BoC lowered its overnight target rate from 1.0% to 0.75 percent. After the announcement, the USD/CAD traded at a high of 1.2275 and the pair subsequently consolidated at 1.2286, up 1.39 percent. According to BoC, the falling oil prices are negative for underlying inflation and growth in Canada and they also expect growth in the economy to decline to about 1.5 percent and the output gap to widen in the first six months of 2015. Also, inflation is expected to fall below the bank’s target in 2015 before increasing again in 2016. The Canadian dollar also traded lower against the Japanese yen and the euro and CAD/JPY traded at 95.62, down 2.52 percent while EUR/CAD traded at 1.4305, up 2.27 percent.

STOCK.com   Stocks

On Wednesday, American Express Co (N:AXP) reported an increase of 10.7% in profits in the fourth quarter as well as a higher net interest income. According to the world's largest credit card issuer, net income rose to $1.39 per share, or $1.45 billion from $1.21 per share or $1.31 billion a year earlier. Also on the upside was the total revenue, net of interest expense, which rose to $9.11 billion, up 6.6%. The shares of American Express Co. are currently trading at $87.67 a share. Meanwhile, the shares of EBay Inc. (EBAY, -0.56%) also rose to $54.90, up 2.9%, in the extended trading session on Wednesday. This came after the company reported expected earnings while job cuts as well as an agreement with billionaire and the company’s largest active shareholder Carl Icahn over corporate governance, helped to offset a weak outlook. EBay reported adjusted fourth-quarter revenue of $4.92 billion and earnings of 90 cents a share which was not far from analyst expectations for revenue of $4.93 billion and fourth-quarter earnings of 89 cents per share. Also, EBAY announced that it would cut about 2,400 jobs, about 7% of its workforce and their first quarter outlook for this year fell below Wall Street expectations.

STOCK.com   Commodities

In Asian trading on Thursday, gold prices declined as investors focus on the upcoming European Central Bank meeting today which is expected to further ease policy. Gold futures for delivery in February fell to $1.290.80 a troy ounce, down 0.22 percent on the Comex division of the NYMEX. On Wednesday, the precious yellow metal remained above the $1,300 level after data showed that while housing starts topped forecasts, the number of U.S. building permits in December fell to 1.032 million units, down 1.9 percent. This missed analyst expectations for a rise of 1.3% to 1.055 million units in December. In other commodity news, silver futures for delivery in March traded at $18.20 a troy ounce, marking the highest level since the 19th of September 2014.

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