The stock markets in the United States gained today driven by the recovery of equities in the commodities and technology sectors. China’s measures to support the yuan made investors optimistic that it can curtail the turbulence that caused the recent selloff in the global financial markets. Investors were worried that China’s currency and stock market turmoil would spread to the global economy.
China stepped up its efforts to defend the yuan by buying the currency in Hong Kong, which ignited a record increase in the money-market rates in the city to prevent bearish speculations.
Abacab Fund Sees Mispricing In Options As Black-Scholes Has Become “Inadequate”
Abacab Asset Management's flagship investment fund, the Abacab Fund, had a "very strong" 2020, returning 25.9% net, that's according to a copy of the firm's year-end letter to investors, which ValueWalk has been able to review. Commenting on the investment environment last year, the fund manager noted that, due to the accelerated adoption of many Read More
In an interview with Bloomberg, Alan Gayle, a senior strategist at Ridgeworth Investments, commented, “Trying to read the day-to-day implications of Chinese policy moves is exceptionally challenging. The market is doing some filling in after a selloff. It’s not looking too fundamentally based; it looks more technical. I don’t think we can yet declare victory.”
Yesterday, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, stated that U.S. economy was unlikely affected by the selloff in the global stock markets.
Adam Parker, chief equity strategist at Morgan Stanley, believes that the earnings season will “calm fears” among investors. He noted that the expectations for the energy and raw materials sectors had been lowered significantly and “should be cleared” considering the lack of “large headwinds from macro factors.”
Meanwhile, Christian Mueller-Glissmann, managing director for portfolio strategy at Goldman Sachs Group suggested that stocks could fall further, which would create investment opportunities.
“After such a sharp correction, from a valuation point of view, you start to build that buffer that you didn’t have at the beginning of December. You do have the potential to deliver high single-digit earnings growth. Europe should do well,” said Mueller-Glissmann.
- Dow Jones Industrial Average (DJIA) – 16, 516.22 (+0.72 %)
- S&P 500- 1,938.68 (+0.78%)
- NASDAQ- 4,685.92 (+1.03%)
- Russell 2000- 1,045.15 (+0.31%)
- EURO STOXX 50 Price EUR- 3,064.66 (+1.23%)
- FTSE 100 Index- 5,929.24 (+0.98%)
- Deutsche Borse AG German Stock Index DAX- 9,985.43 (+1.63%)
- Nikkei 225- 17,218.96 (-2.71%)
- Hong Kong Hang Seng Index- 19,711.76 (-0.89%)
- Shanghai Shenzhen CSI 300 Index- 3,215.71 (+0.73%)
Stocks in Focus
The stock price of Apollo Education Group surged more than 15% to $7.39 per share. Yesterday, the management of the private education provider stated that they were exploring all options including mergers and buyouts. The Wall Street Journal reported that Apollo Global is in advanced negotiations to acquire the private education provider.
Cognizant Technology Solutions gained more than 6% to $59.65 per share. The company maintained its guidance for fiscal 2015 although its 11 delivery and operating centers were affected by the flooding in Chennai, India. Cognizant expected to chives $12.41 billion in revenues, in line with the consensus estimate for 2015. The company estimated to deliver earnings of $3.03 per share, slightly lower than the $3.04 per share expected by analysts.
The stock value of Super Micro Computer increased more than 26% to $27.27 per share. The company’s preliminary fiscal second-quarter 2016 results showed that it could deliver adjusted earnings of around $0.69 to $72 per share, better than the consensus estimate of around $0.60 per share. The company expected to achieve net sales of around $637 million to $639 million, above the $600.1 million consensus estimate.