Market Summary – 1/25/2015

Market Update

Here is the Market Blog for the week of 1/20/2015, brought to you by Aabhash Gautam and Ken Croker.

 

The week of January 20, 2015 was a rather bullish week. The major indices were up all across the board. Here’s where they finished on Friday:

Dow Jones: +2.03% to finish at 17,672.60

S & P 500: +0.34% to finish at 2,051.82

Nasdaq: +1.15% to finish at 4,757.88

SPDR Sector Performances:

  • Energy (XLE): +0.39%
  • Utilities (XLU): +3.71%
  • Materials (XLB): +2.44%
  • Technology* (XLK): +3.65%
  • Industrials (XLI): +1.01%
  • Healthcare* (XLV): +1.04%
  • Financials* (XLF): +2.41%
  • Consumer Staples (XLP): +1.58%
  • Consumer Discretionary (XLY): +3.16%

Other Indicators

  • S&P 500 Volatility Index (VIX): -25.59%
  • SPDR Gold (GLD): +2.72%

Last week the Swiss National Bank’s decision to abandon the Swiss franc’s peg to the Euro heavily hurt the nation’s economy. Mild effects were also seen worldwide, with stock markets falling in the US and volatility rising. The market bounced back this week, with the European Central Bank buying back bonds to counter the Swiss National Bank’s decision.  More on these decision can be read here: https://docs.google.com/document/d/19PyOwL4PSHXGIywfYkf9rtK29A5E8MjEOYHGkPeVr_4/edit

Weekly Commodity Update- Oil: Oil had another disappointing week. The death of the Saudi Arabian king, Abdullah bin Abdulaziz Al Saud, caused U.S. oil to fall this past week. The United States Oil Fund fell to $17 this week. WTI had a significant drop this week to end at $45.59. Brent Crude Oil ended at $48.79. Crude still seems to be spiralling out of control with no end in sight. Analysts are predicting this crisis may take a full year to stabilize, which is not good news for major oil exporters such as Russia and Venezuela.  Russia was forced into evasive action this past week, as it rewrote its budget after losing $21 billion to this crisis. Investors looking to invest in oil should do so with a long-term mindset at this point in time.

Major Stock Performances this Past Week:

Apple (APPL) : After peaking at $119 per share on November 26, 2014, the Apple stock dropped in price until last week. It’s stock price got a boost from a good earnings prediction from SkyWorks Solutions, the company that sets the chips in Apple Iphones. Apple sputtered through the first part of the year before this past week’s push. Analysts predict stellar 4th quarter earnings on Tuesday which will most likely raise the stock’s price even higher. Furthermore, Apple has always been regarded as one of the safest stocks on the planet leaving no large room for long-term worry.

Conclusion: Bullish on Apple

Twitter (TWTR): Twitter saw its stock price rise by just under $2 last week to end at $39.42. Twitter’s rise comes at the heels of speculation that Google is preparing to buy Twitter.

Conclusion: Bullish on Twitter

Google (GOOG): Google had a very impressive week. Google opened the week at $510.90 and ended at $539.95 on Friday. The $29 increase came the heels of speculation that the tech giant would be buying Twitter. The deal itself hasn’t occurred yet, but I believe Google is on the rise and should be in most people’s portfolios. Also note that it will be releasing its earnings on Thursday.

Conclusion: Very Bullish on Google

Ebay (EBAY): Ebay saw its stock price soar by $2 between Wednesday and Thursday of last week. As of Thursday it had increased by 7% on the week, before dropping to $56.76 on Friday. The bullish trend this pack occurred after it announced a stepped-up buyback program of its shares, as well as plans to reduce its expenses via layoffs. However, Ebay may not sustain the trend for long as it fell short of earnings expectations with a revenue of $4.9 billion vs. expected $4.93 billion.

Conclusion: Neutral on Ebay

Stocks to Watch this Week:

Microsoft (MSFT): Microsoft was bullish last week as it rose from $46.32 on Tuesday to $47.18 on Friday. Microsoft has an earnings report tomorrow and analysts have predicted strong earnings for the tech giant. Keep your eyes on Microsoft as it may see a jump after-hours tomorrow and on Wednesday, depending on the strength of its earnings report.

Major Upcoming Earnings Reports:

  • Monday
    • Microsoft (MSFT); Texas Instruments (TXN)
  • Tuesday
    • AM: 3M (MMM); American Airlines (AAL); Procter & Gamble (PG); Pfizer (PFE); Illinois Tool Works (ITW); Caterpillar (CAT); Lockheed Martin (LMT)
    • PM: Apple (AAPL); AT&T (T); Yahoo (YHOO); Ace Limited (ACE)
  • Wednesday
    • AM: Boeing (BA); Progressive (PGR)
    • PM: Facebook (FB)
  • Thursday
    • AM: Alibaba (BABA); Ford (F); Dow Chemical (DOW); Time Warner Cable (TWC); Sherwin-Williams (SHW); Valero (VLO); Hershey’s (HSY)
    • PM: Google (GOOGL); Amazon (AMZN); Visa (V)
  • Friday
    • Chevron (CVX); Honda (HMC); Eli Lilly and Company (LLY); Xerox (XRX)

Happy Trading Everyone!

Aabhash Gautam, Secretary

Ken Croker, VP