Yesterday weak corporate reports caused sales of U.S. stocks | IFCM UK
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Yesterday weak corporate reports caused sales of U.S. stocks - 21.5.2014

The world major stock indexes fell yesterday. There was no important negative macroeconomic data appeared. Sales of U.S. stocks contributed to weak financial reports from retailers in the United States. Five of them became leaders of the fall in the S&P500 index.

In this regard, the drop in the Wal-Mart (WMT) quotations, which we wrote about in previous reviews, marking the negative, was 1.8% for two days. The industrial equipment and machinery manufacturer - Caterpillar (CAT) reported a reduction in retail sales by 13% and its shares have fallen by 3.6%. This company has the highest "weight" in the Dow Jones industrial average (DJI). The round turn on the U.S. exchanges rose yesterday by 16.3% compared to Monday and was average for the month. European stocks fell after the shares of Vodafone, which we wrote about in the previous review. Its quotes have fallen by 5.5%. Japanese Nikkei dropped slightly. The BOJ head, Haruhiko Kuroda said that there is no need to increase the stimulus. Investors took his words positively. We believe that the decline in the Japanese stock index was due to the appreciation of the Yen (USDJPY) to a maximum of 5 months.

Today we expect the Fed meeting minutes from April at 18-00 CET. At 15-00 CET, the Fed chairman, Janet Yellen will have a speech. Besides it, three regional directors will make statements. In our opinion, this can affect the dynamics of U.S. stocks. The head of the New York Fed, William Dudley said on Tuesday that one should not rush to raise interest rates. We do not exclude that if the similar opinion is expressed by the Fed leader, the stock markets may react with growth. As for the EU, at 14-00 CET we will see the data on consumer confidence in the Eurozone. It can affect European stocks if markedly deviates from its neutral preliminary forecast. Tomorrow morning, we will see the manufacturing PMI from Japan and China. They can affect Nikkei and commodity futures, respectively. Moreover, the preliminary forecast of the Chinese PMI, in our opinion, is positive.



As it was expected, the quotations (Oil, Brent) continued to rise. Besides the Libyan factor and Chinese demand, which we wrote about in previous reviews, this contributed to its forecast for U.S. inventories. According to the American Petroleum Institute, the U.S. crude inventories fell last week by 10.3 million barrels. While the reserve in Cushing storage facility in Oklahoma decreased by 261 thousand barrels. Now market participants expect the official U.S. data on oil reserves and petroleum products. They will be announced today at 14-30 CET.



The Natgas prices are corrected upwards. An additional factor for this was a threat to the project on liquefied natural gas (LNG ) export from ExxonMobil to Papua New Guinea valued at $19 billion. The government of this country wants to increase the cost significantly to ExxonMobil's LNG. Note that the estimated gas production will be 255 billion cubic meters for 30 years. This compares with the volume of Russian gas supplies to Europe.



The Copper prices come cheaper on second consecutive day. Most market participants believe that this is a technical correction after the price failed to exceed the level of $7,000 per ton ($3.176 per pound) in London. Note that Chinese Copper rose to $7700 per ton. The premium amount exceeded the normal level almost by 4 times.

The grain futures rose slightly against due to possible harvest reduction in Ukraine. According to the Ukrainian Agrarian Confederation, this year's cereal production will drop to 60-57 million tons from 62.9 million tons a year earlier.

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