World markets start the week mixed
After Friday’s confident close for Wall Street with the dollar weakened Monday’s trading on world markets has been mixed so far. In Asia the boost from New York has helped Tokyo and Shanghai end Monday with multi-year highs while Australia and South Korea closed lower. Europe’s investors are once again focused on Greece’s debt with the country’s prime minister due to meet with Germany’s chancellor today.
US stock futures are trending lower. Oil is trending lower (Brent $54.67, WTI $45.65 at 5.45am ET). Gold is trending lower.
Chicago Fed National Activity Index at 8.30am ET
Existing Home Sales at 10.00am ET
Calpine Corp, Lincoln Park and Vericel Corp are among those reporting results today.
US companies are sitting on a huge pile of cash
The cash reserves of America’s companies are at a record high but what are they going to do with it all? Analysis by FactSet focusing on S&P 500 companies has found a record cash stockpile of $1.4 trillion but many of them are reluctant to spend it. While investing in equipment and employees would be a great boost to the economy and shareholders would welcome increased dividends, it seems that the cash is mainly sitting in the bank. The figures are skewed by the energy sector which is cutting capital spending and holding onto reserves to ride out the current tough times. Other industries, healthcare and technology are expected to increase spending in the coming year.
Is oil heading for $35?
A world expert on oil is predicting that prices will hit as low as $35 in June. FACTS Global Energy chairman Fereidun Fesharaki says that “there is no floor to the price of oil. The oil floor is the cash cost of shale, which is about $20-$25, so it can go as low as that but it won't stay there.” He told a conference in Asia today that oil prices could fall by $5 if an expected deal on Iran’s nuclear program is agreed and the country is allowed to increase its oil output to pre-sanction levels. He also noted that Saudi Arabia can produce oil for as little as $3 a barrel whereas it costs shale producers $40. Read the full story.
Fed profits up 30 per cent
The Federal Reserve increased its profit to $101.3 billion in 2014, almost 30 per cent higher than 2013. The figures, released Friday, show that the central bank has assets of around $4.5 trillion and contributed $966.9 billion to the Treasury.