Market Commentary | Oil’s up, market’s up

A rebound in the price of oil as well as a batch of surprising earnings reports from the likes of Macy’s Inc and Zurich Insurance Group helped lift global stocks to a record high on Thursday. Asian markets closed mixed as stock in Shanghai edged slightly lower while stocks in Hong Kong pushed higher. European markets were more optimistic as a rebound in oil prices helped boost investor sentiment. It was a similar story over on Wall Street, as US stocks advanced thanks to upbeat corporate results that buoyed investor sentiment about the US economic growth.

Oil prices bounced back from a sharp drop on Wednesday, and were trading significantly higher on Thursday as comments from Saudi Arabia’s energy minister raised the possibility that major producers will take action to stabilise the market at a meeting next month. Prices of Crude oil shot up 3.5% to trade at $43.40 a barrel. This led to a rebound among oil producers, with the likes of Total SA, Tullow Oil and Royal Dutch Shell all posting gains on the day.

The insurance sector was in focus after key earnings from a number of companies. Zurich Insurance posted a net income of $1.6 billion for the first half, down 22% percent from last year. But shares jumped 4.5% after the firm said its operating profit at its general insurance business rose, beating market expectations for a fall.

Pushed to the bottom of the index on Thursday was Old Mutual Plc. The financial services company posted a rise in its net profit, but this was offset by a decline in first half operating profit. Shares traded 4.4% lower as a result.

Advancers were led by Kohl’s Corp, Macy’s Inc. and Alibaba group holdings, after all three companies reported earnings that topped estimates. Shares in Kohl’s Corp rallied 13.8%, and Alibaba shares were up 5.23%. Ahead of the bell, shares in Macy’s spiked 13% after it announced the planned closure of 100 retail sites. Shares ended the day 17.09% higher.

But shares in Valeant Pharmaceuticals International tumbled on Thursday after the Wall Street Journal reported that US federal prosecutors had opened a federal investigation into whether the drug maker defrauded insurers. The news sent shares 9.5% lower.

Meanwhile, a weekly jobless claims report pointed to continued low levels of layoffs, while both import and export prices pushed higher suggesting a possible pick-up in inflation. Weekly jobless claims ticked down to 266,000 staying below the 300,000 layoff level for 75 weeks in a row.

Shares in Apple started the day trading higher, but couldn’t keep up the momentum and ended the session in the red. RBC Capital boosted its price target, citing expectations that iPhone sales will start to grow in the December quarter, but this was not enough to keep apple in the green. Shares reversed early gains to end the session trading 0.06% lower.

Shares in Under Armour shot up following news of three newly appointed executives. The company has appointed Kip Fulks as the new chief product officer, Colin Browne as president of global sourcing and Andy Donkin as chief marking officer. Under Armour shares were up 4.44% in Thursday’s session.

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.