Stock markets in the United States continued to go downwards on Monday as Treasury yields increased to heir highest level at 2.889%. Investors remain cautious and waiting for signs regarding the next monetary policy. The Federal Reserve Open Market Committee is expected to release the minutes of its July meeting on Wednesday, which may reveal indications as to whether policymakers will reduce the $85 billion monthly bond purchases.
The Dow Jones Industrials Average (DJIA) suffered its largest weekly decline over the past 14 months after energy stocks plummeted. In a phone interview with Bloomberg, Eric Green, director of research and fund manager at Penn Capital Management said, “This market has been on the weaker side in the last few weeks, digesting recent gains. Most earnings are out now and there’s not a catalyst to move stocks up or down.”
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
Several analysts including Ed Yardeni of Yardeni Research opined that the recently released economic data showed that the U.S. economy is improving and the Federal Reserve should start tapering its monthly quantitative easing, which he believes positive for equities.
However, Yardeni also noted. “The real problem for stocks is that bond market has started to normalize in anticipation for QE tapering. The rebound in bond yields around the world could dampen global economic growth, which already is relatively slow.” Furthermore, he emphasized that the rebound of mortgage yields in the United States is depressing mortgage applications to refinance and to buy homes.
- Dow Jones Industrial Average (DJIA)- 15, 019 (-0.41%)
- S&P 500- 1,646 (-0.58%)
- NASDAQ- 3,589 (-0.37%)
- Russell 2000- 1,015 (-0.90%)
- EURO STOXX 50 Price EUR- 2,823 (-1.08%)
- FTSE 100 Index- 6,465 (-0.53%)
- Deutsche Borse AG German Stock Index DAX- 8,366 (-0.31%)
Asia Pacific Markets
- Nikkei 225- 13,758 (+0.79%)
- Hong Kong Hang Seng Index- 22, 463 (-0.24%)
- Shanghai Shenzhen CSI 300 Index- 2,331 (+1.18%)
Stocks In Focus
The stock price of Apache Corporation (NYSE:APA) declined by more than 4% to as low as $75.31 per share today. Analysts at Stifel Nicolaus downgraded its rating from Buy to Hold due to concerns related to the turmoil in Egypt. Apache’s production in Egypt accounts 19% and CF accounts 24%.
Cobalt International Energy, Inc. (NYSE:CIE) dropped by 15% to as low as $24.75 after the company revealed that it did not find commercial hydrocarbons in its Ardennes #1 exploratory well in the Gulf of Mexico. According to Cobalt COO, Van Whitfied, the result was disappointing, but the company remains positive regarding its other prospects in the Gulf of Mexico.
The stock value of Dollar General Corp. (NYSE:DG) gained by more than 3% to as much as $54.47 per share after analysts at JPMorgan Chase & Co (NYSE:JPM) upgraded their rating for the stock from Neutral to Overweight due to increased signs of stability and potential shares buyback.
Intel Corporation (NASDAQ:INTC) reached as high as $22.70 a share, an increase of more than 2% after analysts at Piper Jaffray upgraded their rating for the stock to Neutral and increased their price target to $22 per share. Analysts Auguste Richard and Jennifer Baxter expect Intel to enjoy a modest corporate refresh cycle and they believe that its new Bay Trail processor is a strong product for consumers who prefer a Windows tablet.