The stock markets in the United States moved slightly today after experiencing a huge drop last week. The latest report from the Department of Commerce showed that purchases for new home sales in December declined 7% to 414,000.
The Federal Reserve is monitoring economic data to determine when it will start tapering its monthly bond buying program. Last month, the central bank said it will reduce its monthly quantitative easing by $10 billion to $75 billion, but it did not indicate the timing of the reduction. Policy makers will start their meeting tomorrow to determine the time and pace of the planned reduction.
As equity long/short hedge funds have struggled this year, managed futures funds have been able to capitalize on market volatility and generate some of the best returns in the hedge fund industry. The managed futures sector refers to funds known as commodity trading advisors, or CTAs, which generally use a proprietary trading system to trade Read More
Commenting on the current market situation, Sandy Villere III, fund manager at Villere & Co told Bloomberg, “The market is volatile and it just feels like a lot scared buyers are out there. We don’t see a major pullback so we’re using this opportunity to buy good-quality, growth stocks at reasonable prices.”
On the other hand, Wayne Lin, portfolio manager at Legg Mason Inc opined that the situation in the emerging markets has not played out yet. He said, “The big question is, is it the beginning of another macro event, or is it just people worried about losing their profits and selling off? People are evaluating whether or not markets are as safe and steady as they have been.”
The emerging markets experienced that worst start this year amid signs that China’s economic growth is slowing down.
- Dow Jones Industrial Average (DJIA)- 15,838.72 (-0.25%)
- S&P 500- 1,781.56 (-0.25%)
- NASDAQ- 4,083.61 (-1.08%)
- Russell 2000- 1,132.67 (-1.00%)
- EURO STOXX 50 Price EUR- 3,014.62 (-0.45%)
- FTSE 100 Index- 6,550.66 (-1.70%)
- Deutsche Borse AG German Stock Index DAX- 9,349.22 (-0.46%)
Asia Pacific Markets
- Nikkei 225- 15,005.73 (-2.51%)
- Hong Kong Hang Seng Index- 21,976.10 (-2.11%)
- Shanghai Shenzhen CSI 300 Index- 2,215.92 (-1.33%)
Stocks in Focus
The stock price of Caterpillar Inc. (NYSE:CAT) rose more than 5% to as much as $92.30 today after reporting better-than-expected financial results and announced its plan to buy back share worth $10 billion. The company posted $1.54 earnings per share, higher than the $1.27 earnings per share average estimate of Wall Street analysts.
The shares of Merck & Co., Inc. (NYSE:MRK) rose to its highest level at around $54.09 per share today after an analyst at Morgan Stanley (NYSE:MS) analyst, David Risinger upgraded its rating for the stock and applauded the company’s strategy and optimistic outlook regarding its experimental cancer drug. Risinger revised his rating for the stock from Underweight to Overweight with a $60 price target. According to him, Merck & Co., Inc. (NYSE:MRK) is expected to report positive data from a series of clinical trials for its cancer drug MK-3475 this year. He increased his sales forecast for the drug to $6.1 billion in 2020.
Xerox Corporation (NYSE:XRX) declined nearly 6% to as low as $10.56 per share after Barclays analysts Ben Reitzes and Ryan Jones downgraded their rating for the stock from Equal Weight to Underweight predicting that 2014 will be a difficult year for the company. The analysts noted that the company’ margins have been inconsistent last year, and they think that the situation will continue.