Daily Market Update

Daily Market Update

Daily Market Update Oil at near 6-year low as UAE defends policy
A spokesperson from the United Arab Emirates has defended the OPEC policy of maintaining production levels despite plunging prices. The comments by the country’s oil minister Suhail bin Mohammed al-Mazroui has further impacted the oil price which is now down to below $45. The minister had a softer tone on US shale producers than some of his OPEC colleagues though, saying that they are an important part of the supply market and need to remain. Asian markets closed mostly lower with the exception of Shanghai and Hong Kong due to rare upbeat data from China showing it almost doubled its trade surplus in December with falling imports and an almost 10 per cent increase in exports. European markets are being impacted by energy stocks and are nearly all trending lower so far. US stock futures are trending higher along with gold; oil is lower.
 
Today’s data
NFIB Small Business Optimism Index at 7.30am ET
JOLTS labor market/job opening data at 10.00am ET
Treasury Budget at 2.00pm ET
Ceres Inc, MVC Capital and Ubiquity Inc are among those reporting earnings today.
 
Interest rates could rise in June
Comments from the president of the San Francisco Fed have indicated that interest rates could rise in the summer. John Williams says that by June the vote on whether to change the rate would be “a close call” due to the improving labor market. Speaking to Bloomberg he said that assuming inflation holds up June would be a “reasonable guess”. Dennis Lockhart of the Atlanta Fed made similar predictions; both men will be voting on policy this year.
 
Banks unlikely to increase dividends for a while
Investors may have to be patient to receive higher dividends from banks due to falling incomes from oil. JP Morgan Chase and Wells Fargo are both reporting earnings tomorrow and, in line with most of the big banks, results are expected to show capital reserves above those required by regulators. However analysts are not expecting those additional funds to be returned to investors as banks will want to hold onto cash during the volatile market conditions.
 
Google stocks head for a bear market
While many big name tech firms are soaring, Google is having a tougher time at the moment. Stocks in the search and advertising giant have fallen by 19.1 per cent from their 2014 peak, almost a year ago. A 20 per cent loss would be considered a bear market for the firm’s shares. Google was noticeably absent from this year’s Consumer Electronics Show with little to show currently.
 
American families struggle to recover from the recession but Congress is booming
Congress members are enjoying a boom in their wealth while the average American family is still struggling after the crisis according to new research. The Center for Responsive Politics says that while families’ median wealth has fallen by 43 per cent since 2007 Congress members have seen a 28 per cent increase. In 2013 Congress members had a median worth of $1 million, 18 times higher than a typical family.