IFC Markets - Analytics

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    Positive earnings reports and rebounding oil support the stocks

    US stocks were on the rise on Thursday as positive quarterly earnings report from Facebook pushed technological sector up and rebounding oil supported the energy sector. Facebook shares sky-rocketed 16.5%, their biggest one-day growth since 2013, after posting the 52% higher 4Q revenue than expected. The S&P 500 energy sector rose 2.6% on firmer oil prices. The Dow Jones Industrial Average index advanced 0.8% to 16,072.28 while Nasdaq 100 composite rose 0.9% to 4,508.26. S&P 500 index added 0.66% to 1,895.47 with 7 out of 10 its sectors being in the black except for financials, technology and healthcare. The US Dollar index live data show the index, which measures the greenback’s value against a basket of six major currencies, fell 0.4% to 98.97. On Wednesday the Fed left the interest rates unchanged but said it would closely monitor the market conditions. Today at 14:30 CET the preliminary Q4 GDP will be released in the US, its growth is expected to slow down to 0.8% from the previous 2.0%. At the same time the preliminary gross domestic price index for Q4 is expected, the tentative outlook is negative as well. The core personal consumption expenditures are expected at the same time and the outlook is negative. At 15:45 CET the Chicago purchasing managers’ index for January will come out. At 18:00 the Baker Hugs oil Rig count will be released, the current count is 510 units.

    European stocks looked south on Thursday on weak earnings reports. FTSEurofirst index closed 1.7% lower at 1,318.22, Eurostoxx 50 index slid 2.1% down. Swiss drugmaker Roche stocks fell 3.8% after it reported lower earnings and dividends than expected. Stocks of another major European drugmaker, Novartis, fell 3.8%. In economic terms, the core consumer price index for January was released today the reading being better than expected at 1.0% year over year. The gross consumer price index for January is 0.4% in line with expectations. Today European indices are on the rise following the Bank of Japan decision to go sub-zero. EURUSD is 0.32% down and is traded at 1.0901.

    Nikkei 225 index advanced 2.8% today to more than a 2-week high after the Bank of Japan surprisingly cut the rates to -0.1%. This week Nikkei added 2.8% partly recovering from the January losses of almost 8%. The rates decision came unexpectedly as last week the Governor of the Bank said it was not planning the negative interest rate policy. On this news USDJPY pair strengthened more than 2% to 121.495 yen during the trading session but closed a bit lower at 120.89.

    Chinese stocks advanced more than 3% today recovering after this week’s losses. The CSI300 index rose 3.2% to 2.946.09. The Shanghai Composite index advanced 3.1%. This January is the worst month for both indices since the crisis of 2008 as they lost already around 20% since the start of the year.

    Oil prices are edging up on the talks Russia and OPEC may cooperate in cutting its production volumes. Brent futures rose more than 25% after hitting the though at $27.10 a barrel last week. On Thursday Brent prices hit an intra-day high at $35.84 a barrel. Russia's Deputy Prime Minister Arkady Dvorkovich said today the oil production is likely to fall in Russia due to lower investment but the state would not intervene.

    Copper prices edged up today supported by recovering oil prices and hopes of stabilizing demand from China. Three-month copper in London advanced 0.8% to $4568 today early in the morning.

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