World stock indices rose on Friday | IFCM India
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World stock indices rose on Friday - 21.7.2014

The world stock indices rose on Friday. We believe that a good reporting of the U.S. company Google has contributed to this fact. Its stock went up 4.2% and caused advanced quotes in IT sector. Particularly, Facebook stock has jumped 3%. The quarterly reporting of the aircraft manufacturer Honeywell also pleased investors and its stock rose 1.7 %.

On Friday the U.S. macroeconomic indicators were weaker than the forecast, but it did not affect the market. Trade turnover on U.S. stock exchanges was 0.5% above the average for the month. Eighty two companies from the S&P 500 list submitted their reports on July 18. Fifty six of these companies exceeded analysts’ forecasts. In general, the earnings season is proceeding satisfactorily. Investors expect an increase by 5% in the total return of the S&P 500 companies. It is lower than 8.4% April forecast. The Dow rose 0.9%, S&P 500 - 0.5% and the NASDAQ 0.4% over the past week. Significant macroeconomic data is not expected today in the United States. Futures on the U.S. stock indices are now "in the red" because of the rising tension in Ukraine. The corporate information will continue to be published. Prior to the trade beginning Halliburton and Hasbro will be reporting, and after closing: Texas Instuments, Netflix, Chipotle Mexican Grill and Steel Dynamics.

European stocks grew in line with the global trend on Friday. Today they are getting cheaper for the same reason. Macroeconomic data in the EU is not expected.



Nikkei continues to have active fluctuations in its neutral trend under the influence of external factors. On Friday it tumbled to three-week minimum due to the accident of the Malaysian aircraft, but then grew up with other global indices. Accordingly, it is falling today.

A rise in gold prices is observed today, due to increased geopolitical risks in Ukraine and in the Gaza Strip, Mid East, as well as due to the drop in global stock indices. Gold is considered to be a protective asset at the period of political and economic instability. Meanwhile, the total net-long position on gold purchasing dropped on July 15, according to U.S. Commodity Futures Trading Commission (CFTC). The volume of short positions (in favor of falling prices) rose 32% last week, and that was the most significant increase in seven weeks. Note that the number of positions on silver purchase has grown to its peak since October 2010. It can be assumed that this metal looks now more attractive than gold for investors.



Copper prices fell considerably on Friday. That happened due to concerns of tightening credit conditions on metal bail in China. An additional factor was the possible exports resumption of non-ferrous metals from Indonesia for the first time since January. The government has almost reached an agreement with U.S. companies-manufacturers concerning changes in export duties. Note that despite the copper quotes reduction its reserves on the London Metal Exchange in June fell 75% to six-year minimum. The number of long positions on copper has increased by one quarter this week and has reached the largest volume since 2006.



World cotton prices have been falling 11 weeks in a row, which has become the most long-term decline over the past 55 years since July 1959. They have fallen to two-year low and became the leaders of the price fall traded on the world market, 22 basic goods. According to the forecasts of Plexus Cotton Ltd., the U.S. cotton crop will increase 32% this season. According to the USDA, the world cotton reserves will rise 5.1%, the Chinese - 2.5%. We believe that on the background of exceedingly optimistic forecasts and the powerful price fall, cotton quotations dependence on weather forecasts is increasing. In theory, this fact increases a probability of correction.

Grain futures dropped due to the end of the dock workers strike in Argentina. Market participants expect the resumption of exports from the Rosario harbor in Argentina.

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