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Friday, February 26, 2016

Wall Street Update: Global market rally as oil up

At this point, oil cycle is everything and the global market rallied after crude oil goes up as market focused on an upcoming meeting of major oil producers that investors hope could stabilize volatile petroleum markets.

Crude oil futures rose more than 2% after Venezuela reaffirmed an oil producers meeting in mid-March that would include Saudi Arabia, Russia and Qatar. Prior to the announcement, oil was down as much as 3%.

U.S. crude futures CLc1 settled up 92 cents, or 2.9%, at $33.07 a barrel.

Brent crude futures LCOc1 finished up 88 cents, or 2.6%, at $35.29 a barrel, hitting a three-week high.


The US market is also looking bullish as a robust data on durable goods orders indicated a recovery in the manufacturing sector

The Dow Jones industrial average improved by 1.29% to 16,697.36, the S&P 500 added 21.93 points, or 1.14%, to 1,951.73 and the Nasdaq Composite gained 39.60 points, or 0.87%, to 4,582.21.


European equity markets also showed some positivism after this week's downtrend that was caused by fears of Britain taking the exit route from the EU.

Europe's FTSEurofirst 300 lost almost 4% since Tuesday, saw a gain of 2% as risk appetite returned.

Equity markets and oil prices have moved in sync this year so far, but analysts say they expect the two to decouple in the not-too-distant future.

MSCI's gauge of global stock markets was up by 1.1%.

Federal Reserve policymakers have been concerned about the erosion in inflation expectations which could impair efforts to boost domestic price growth to their 2-% goal.

The yield premiums on regular U.S. Treasuries over Treasury Inflation Protected Securities, known as inflation breakeven rates, have risen from their lowest levels since early 2009 in recent days with the rebound in oil prices.

Thursday, February 25, 2016

Wall Street Update: Manufacturing activity data lifts US market at opening

Wall Street Update

Thursday morning saw Wall Street opened slightly higher with data pointing towards a better US manufacturing activity. The market however sees the upside limited by drop in oil prices.


The durable goods orders up by 4.9%, beating the estimated 2.5% as demand picked up across the board. On the other hand, crude prices drop further as global oversupply outweighed the strong U.S gasoline demand.


The investment sentiment is also impacted as fear over the impact on financial sectors increased, with banks preparing for a wave of defaults from oil and gas companies.

According to Reuters report, as at 9:37 a.m. ET (1437 GMT), the Dow Jones industrial average was up 70.06 points, or 0.42 percent, at 16,555.05.

The S&P 500 .SPX was up 7.88 points, or 0.41 percent, at 1,937.68 and the Nasdaq Composite index .IXIC was up 13.41 points, or 0.3 percent, at 4,556.01.

Eight of the 10 major S&P sectors were higher, led by a 0.57 percent rise in financials .SPSY. Banks were the biggest influence.

Jobless data, also released on Thursday, showed claims increased slightly more-than-expected to 272,000 last week, but remained below levels consistent with a tightening labor market.




Advancing issues outnumbered decliners on the NYSE by 1,908 to 702. On the Nasdaq, 1,391 issues rose and 696 fell.

Market Daily Report: KLCI followed Asian market in downward trend

It seems like the short rally is indeed short as we were greeted with another downward trend today.

FBM KLCI falls by 6.01 points to 1,658.16


The FBM KLCI closed at 1,658.16 despite having a rather good start to the day when the market hit the intraday high at 1,672.56 before falling down, tracking the regional trend.

Reuters reported that Asian shares slipped on Thursday as crude oil prices see-sawed and Chinese shares dived, rekindling anxiety about the impact of high market volatility on the global economy on the eve of a G20 meeting in Shanghai.

Crude oil prices fell on Thursday as downward pressure from global overproduction and slowing economic growth outweighed strong gasoline demand and lower US crude output.

Brent crude benchmark was trading at US$34.07 per barrel at 0804 GMT, down 34 US cents from its last close.

On Bursa Malaysia, decliners were more than gainers by about half at 565 compared to gainers at 271. There were a total of 1.65 billion shares traded, worth RM1.86 billion.



The top losers include Petronas Gas Bhd and Petronas Chemicals Group Bhd while British American Tobacco (M) Bhd is the top gainer for the day.



APFT Bhd and Genting Malaysia Bhd are the most active stocks for the day.


WallStreet Update: Late surge in US stocks

The US market saw a late-session rally yesterday to close higher, helped by an increase in oil prices that helped to reduce investors' fears on banks' vulnerability to the big chunk of debt of the energy companies and their ability to repay their debts.

Wall Street Update
 
S&P energy sector saw a gain of 0.9%, trimming its loss in 2016 to 27% after US crude futures went up by about 1%. 

Besides the S&P energy sector, there are 8 other major sectors in the index that saw a gain compared to the previous close.


The three major indexes saw a gain towards the end of the day after a day at the negative territory.

The Dow Jones industrial average rose 0.32% to end at 16,484.99 points and the S&P 500 gained 0.44 percent to 1,929.8. The Nasdaq Composite added 0.87 percent to 4,542.61.

Crude prices near 2003 lows have hammered the earnings of U.S. energy companies, exacerbated fears of a slowing global economy and created turbulence on Wall Street that has left the S&P 500 almost 6% weaker since the start of the year.


The gainers on the NYSE outnumbered the decliners by 1,952 to 1,086. On Nasdaq, 1,759 issues rose and 1,003 fell.

About 8.1 billion shares changed hands on U.S. exchanges, below the 9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Wednesday, February 24, 2016

Market Daily Report: KLCI and Ringgit sink as oil falls

FBM KLCI fell 13.11 points
Reuters reported that oil prices slid on Wednesday, extending the sharp falls from the previous session after top exporter Saudi Arabia ruled out production cuts and industry data showed a further build in US crude stockpiles.

US crude futures were trading at US$31.25 per barrel at 0758 GMT, down 1.95% from their last settlement. International Brent futures were down around 1% at US$32.90 a barrel. Both dropped more than 5% in intra-day trading the previous day.

The consequence of the fall in oil prices are obvious given what we have seen in the past few months...the market fall as well.

FBM KLCI dropped by 0.8% or 13.11 points to close at 1,664.17. 

Across Asia, Japan's Nikkei 225 lost 0.85% while Hong Kong's Hang Seng shed 1.15%.

Bursa Malaysia saw 1.53 billion shares valued at RM1.51 billion traded. Decliners beat gainers at 601 versus 229.

The top gainers included Kuala Lumpur Kepong Bhd and PPB Group Bhd. 

The leading decliner was Dutch Lady Milk Industries Bhd.

The most-active stocks included APFT Bhd and KNM Group Bhd.

Among decliners, Kossan Rubber Industries Bhd fell to an intraday low of RM6.69 before closing unchanged at RM6.75.

Today, the ringgit weakened to 4.224 against the US dollar, tracking lower crude oil prices.

The ringgit tracks prices of crude oil as the commodity forms a crucial portion of the Malaysian economy and government revenue.

Tuesday, February 23, 2016

Market Daily Report: KLCI’s gain cut while Asian region dropped as oil’s rally reversed

Just this morning, Malaysians were greeted with a good news, the oil rally of 6% and it already feels like it’s gonna be a good day for the market.

FBM KLCI closed marginally higher while Asian stocks dropped
Well, it did, at least for a start but as at 5pm, FBM KLCI closed at 1,677.28 points on profit taking after reaching an intraday high at 1,685.88.

In the Asia region, Japan's Nikkei 225 fell 0.37%, South Korea's Kospi dropped 0.11%, while Hong Kong's Hang Seng down to 0.25%.

The oil rally on Monday that had boosted global equity markets made a U-turn. US front-month West Texas Intermediate (WTI) crude futures were trading at US$32.72 per barrel at 0753 GMT, down 67 US cents from Monday's settlement.

International benchmark Brent was also down 61 US cents at US$34.08 a barrel.

On Monday, we have seen oil prices jumped to as much as 7% as there are speculations over the falling US shale output fed the notion that crude prices may be bottoming after their 20-month collapse.

In Europe, Euro and sterling were hit by uncertainty over Britain's membership of the European Union.

Bursa Malaysia saw 1.91 billion shares valued at RM1.8 billion traded. Gainers outpaced decliners at 438 against 417.
The top gainer was Panasonic Manufacturing Malaysia Bhd while the leading decliners included Nestle (M) Bhd and Cycle & Carriage Bintang Bhd. The most active stock was APFT Bhd.

 

Oil rally boosted but has it bottom?

Has oil bottom?
The oil price seems to have bottom after a 20-month collapse as the oil market shown some strength in its rally to go up as much as 6% on Monday. Speculation about the falling U.S shale output has been the main drive for the rally.

Friday's U.S rig count data has been one of the reason for the market reaction as prices began the week with a rebound in Asian trade. The data points to a drop in the number of oil drilling rigs in operations to a December 2009 low after there have been nine consecutive weeks of cut.

The statement by International Energy Agency, the world's oil consumer body in regards to U.S shale oil production to fall by 600,000 barrels per day this year and another 200,000 barrels per day in 2017 also helped the oil rally.
U.S. crude futures settled up by $1.84, or 6 percent, at $31.48 a barrel, rallying above $32 at one point.
Futures of Brent finished up $1.68, or 5 percent, at $34.69.

HAS OIL BOTTOM?

This is the difficult question because the concern on the glut of supply is still there but what has panned out so far seems to be quite comforting for the oil players. Since last week, the oil prices have seen some slight recovery after the Saudi Arabia-Russia led freeze production on oil's output at January's highs.

The agreement may have only acted as a cushion to the drop in oil prices though as another key member of OPEC, Iraq has said on Monday it planned to raise production to above 7 million bpd over the next five years, and export 6 million bpd of that.

Iran, OPEC's fourth largest producer, has repeatedly pledged to raise its output too to pre-sanctions levels.

Despite Monday's gains, some analysts said market conditions were weak, citing weakening demand for crude.

A Reuters poll forecast that U.S. crude inventories rose 3.2 million barrels last week to record highs above 504 million barrels




WallStreet Update: Oil rally lift the Market

The rally in oil prices lifted Wall Street on Monday as energy stocks that have been crushed recently find strength. This includes stocks like Chevron and Schlumberger. 



 As what have been seen over the last few months, Wall Street has been dictated by the oil prices' trend, which have left the market down so far in 2016, although we are seeing a slight recovery last week. The recovery seems to continue as oil gains some strength.

The US crude prices were up by more than 6% albeit still at around decades low.
We are seeing strength in the market across the board, with all 10 major S&P sectors finishing higher.

Besides oil, prices of industrial metals such as copper and zinc rose as concerns and worries over the potential shortages arise.

The Dow Jones industrial average were up by 1.39% to close at 16,620.66 points while the S&P 500 jumped 1.45% to 1,945.5. The Nasdaq Composite gained 1.47% to 4,570.61.

Recent turmoil in global markets and macroeconomic uncertainty has left investors split over whether the U.S. Federal Reserve will raise interest rates this year.
 

Gainers outnumbered decliners on the NYSE by 2,389 to 676 and the similar trend is seen on the Nasdaq, 1,974 issues rose and 829 fell.

The S&P 500 index showed 19 new 52-week highs and one new low, while the Nasdaq recorded 38 new highs and 35 new lows.

About 7.1 billion shares changed hands on U.S. exchanges, below the roughly 9.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Monday, February 22, 2016

Market Daily Report: Volatile trade seen KLCI closed marginally lower

FBM KLCI closed marginally lower


Malaysians who are in the stock market must be fascinated with the stock market movement because of its volatility. The fluctuation of the market happened in a period of the financial reporting season in the country.

The KLCI fell to 1,674.59 despite a rise in major Asian share markets. Japan's Nikkei 225 rose 0.9% while Hong Kong's Hang Seng added 0.93%.

Across the Malaysian market, 1.62 billion shares worth RM1.64 billion changed hands. Bursa seen the market closed with 468 gainers versus 364 decliners.

Export-driven stocks such as Top Glove Corp Bhd and PIE Industrial Bhd were among the top ten gainers. 


The leading decliner was British American Tobacco (M) Bhd.

The most-active stock was APFT Bhd.

Asian share markets rose on Monday, extending last week's gains, as investors awaited a rush of February industry surveys to take the pulse of the global economy, while the sterling stumbled on concerns the UK might yet vote to leave the European Union, according to Reuters.
 

Sunday, February 21, 2016

Malaysia Weekly Highlights

THE FLIP-FLOP STORIES ON FOREIGN WORKERS

This is becoming a habit as Malaysia's Deputy Prime Minister suddenly announced a suspension on the recruitment of migrant workers from all countries, including Bangladesh. 

1.5 million Bangladeshi? As of now, hiring is freeze on all foreign workers
Deputy Prime Minister, Ahmad Zahid was reportedly saying, "The government has made the decision to freeze the intake of all foreign workers, including those from Bangladesh. And we appeal to all employers to hire locals."

The government's announcement was a rather strange one given that it was not long after the news that 1.5 million Bangladeshi workers would be recruited and brought into the country. The sudden change of plan is a strange one indeed but not something new. At best, the flip-flop is likely due to politicians bowing to public pressures. At worst, it shows that our policymakers did not know what they were doing. 

Human Resource Minister Datuk Seri Richard Riot did say that not all 1.5 millions were for Malaysia.

ZETI: BANK NEGARA WILL ALWAYS BE INDEPENDENT

Zeti: Bank Negara will always be independent
Outgoing Bank Negara Malaysia (BNM) Governor Tan Sri Zeti Akhtar Aziz said today the central bank has always been independent and gave an assurance it will remain so after her departure amid investors jitters over its succession plan scheduled to be announced soon.

Zeti also said that no politician should be appointed to succeed her but maintained that none has sat on the board of any financial institutions as well as the central bank.

Zeti’s retirement this April has caused jitters within the financial market as investors raise concerns over possible political interference in the central bank’s succession plan, which could put its independence at stake.

There were also questions about policy continuity and the competence of Zeti’s replacement.

The BNM chief had said recently that the bank had identified a capable successor but appointment power ultimately lies with the federal Cabinet.

Zeti was tightlipped when asked about her successor today but insisted that BNM would remain in good hands.

Zeti also dismissed speculation that she would stay on. There had been talks about strong requests for her to stay but the BNM chief said it was “highly unlikely”.

The daughter of celebrated economist Regius Professor Ungku Aziz Ungku Abdul Hamid, Zeti was handed the reins of the central bank at the peak of the Asian financial crisis in 1998.

She was appointed governor in May 2000, becoming the first woman to head Malaysia’s central bank.


MALAYSIA'S ECONOMY GREW 5% IN 2015

Malaysia's gross domestic products grew 4.5% in the fourth quarter of 2015, the slowest since 3QFY2013, bringing the growth for the whole year to be at 5%. The economy grew 6% in 2014. 

The growth in the latest quarter (4Q2015) was supported by private sector demand.

Bank Negara Malaysia said that th Malaysian economy is expected to face a challenging operating environment in the immediate future and growth will continue to be driven by domestic demand, with some support from net export.

The pace of the domestic demand growth is expected to moderate while the growth in income and employment continues to support consumption. The moderation is expected as households continue to adjust to the higher cost of living.

1MDB vs WSJ  

1Malaysia Development Bhd (1MDB) has said that it never channelled any funds into Datuk Seri Najib Razak's bank accounts. This was in response to Wall Street Journal (WSJ) finance editor's claim that a RM2.6 billion "political donation"  was not from the Saudi Royal family but companies related to the state-owned investment firm.

PM Najib in the news again
 1MDB called editor Ken Brown's latest claim a "lie". 

1MDB said it had never transferred funds to Najib's account and has been stated by the authorities. 

In a Feb 19 statement, 1MDB said, "Contrary to The Wall Street Journal's baseless and unproven allegations, 1MDB has consistently maintained that it has not paid any funds to the personal account of the prime minister. This has been reiterated by multiple lawful authorities, including the Malaysian Anti-Corruption Commission, attorney-general and various reputable international publications, who have confirmed that these funds came from Saudi Arabia."

Brown said WSJ has evidence that the money found in Najib's accounts were from companies and bank accounts "related" to 1MDB in an interview with Australia's ABC News. 

EPF DECLARES 6.4% DIVIDEND 

The Employees Provident Fund (EPF) has declared a dividend rate of 6.40% for 2015 with a total payout of RM38.24bil.

EPF declares 6.4% dividend




The increase was in tandem with the growth in EPF investment assets, which stood at RM684.53bil as at Dec 31, 2015.

In a statement, the EPF said it recorded RM44.23bil in gross income for the last financial year, an increase of 13.18% over the RM39.08bil figure in 2014.

EPF chairman Tan Sri Samsudin Osman said the gross investment income achieved was due to its diversification strategy across multiple asset classes in various countries and markets.

Samsudin described the 6.4% dividend rate as a "commendable performance" given the prevailing challenges.

He said more importantly, the EPF was able to meet its two strategic investment targets of at least 2.5% nominal dividend on a yearly basis as required by the EPF Act 1991 and at least 2% real dividend on a rolling three-year basis.

Commenting on the economic climate, Samsudin cautioned that this year would be more challenging.

Samsudin said the volatility in the currency markets would make it difficult for the EPF to repeat the outperformance in global assets recorded last year.

"Nevertheless, we will continue to preserve and further enhance the value of capital from members' contribution by maintaining stable and consistent returns over the long term within tolerable risk limits," he said.

Last year's dividend can be viewed via EPF's Facebook page at "Kumpulan Wang Simpanan Pekerja", Twitter at KWSPBuzz and on YouTube at KWSP Malaysia.

The latest EPF account statement is available online via i-Akaun at myEPF website (www.kwsp.gov.my)

Alternatively, members can obtain their statement via EPF kiosks or visit any EPF branches. 

MORE FOCUS ON FED AFTER CPI ROSE ABOVE FED'S 2.0% TARGET

The more you look at the financial market and economy, the more uncertainties might surface. When we were coming into 2016, most people were talking about the possibilities of three to four interest rate hikes but just about 2 months down the road, the tone had changed with market participants changing their view to a possibility of the Fed raising the rate as once, if at all, in light of weak inflation and global volatility.


But just one new data and we've got people getting up on their feet and watch for Federal Reserves for clues about the US central banks next move because apparently, there is a hot reading on inflation on Friday.

Friday's data showed the core consumer price index (CPI), a measure of underlying U.S. inflation, rose in January by the most in nearly 4-1/2 years to a 2.2 percent annualized rate.

It drew particular attention as the number was above the Fed's 2.0 percent target, though it is not the central bank's benchmark inflation measure.

The uptick in price pressures has already shifted the market's expectations on the Fed's next move.

The dollar rose alongside Treasury yields shortly after the data, as markets saw the higher inflation as nudging the Fed towards tightening policy. The euro hit its lowest since Feb. 3.

Equity markets have also closely followed expectations on Fed policy. Lower rates tend to support stocks in general, with high-paying dividend names like utilities gaining investors' favor. In an environment of rising rates, banks tend to take the lead.

The expectation of higher interest rates has been cited as one of the reasons for stocks having fallen as much as 11 percent this year.

The S&P 500 .SPX is down 6 percent so far in 2016, and on track for its third positive week of the year.

The inflation numbers add to recent economic data, including a stronger job market and consumer spending, that will force the Fed to seriously reconsider more rate hikes, said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.

"UNWISE" TO RAISE RATES?

Personal consumption expenditures, the Fed's favorite measure of price inflation, is out next Friday and could confirm or outweigh the trend in the CPI reading. Among other market-moving numbers next week are purchasing managers indexes (PMIs) for the manufacturing and services sectors and two gauges of consumer confidence.

Investors and the Fed could address a decline in earnings, now seen as down 3.7 percent for the S&P 500 in the fourth quarter of last year, and lower outlooks for 2016 as other reasons to keep rates lower for longer.

The incoming data gives more weight to next week's scheduled speeches from many Fed officials, including Vice Chair Stanley Fischer on Tuesday and Atlanta Fed President Dennis Lockhart on Thursday as markets look for a change in tone. Two Fed surveys of business conditions, Richmond and Kansas City, are also out next week.

In a U-turn late on Wednesday, Fed voting member and hawkish St. Louis Fed President James Bullard said it would be "unwise" to raise rates further given U.S. inflation data and global volatility. He speaks Wednesday in New York, followed by questions from the media.

The Fed's policy-setting committee next meets March 15 and 16 in Washington, with a statement followed by a news conference with Chair Janet Yellen.

Friday, February 19, 2016

Education: Why are Corporations so concern about their stock price?


When the share price of a company is high or increasing, generally corporations, or more specifically their management teams, are happy about it and there is good reason for it....below are three of it that I've read about it before but I think all of it could be summed by 1 word: GREED
GREED IS GOOD



1) The price of a company's shares is often used as an indication of the overall strength and health of a company. If a company's share price has continued to climb over time, the company and its management are considered to be doing a good job. If everyone is happy and the company is doing well, as reflected by its share price, then management likely will see a raise and there is decreased risk that they will be fired. The management of a company is at a great risk of being removed from the company if they are unable to generate returns for investors. This is done by the Board of Directors, who are elected by the shareholders, and are responsible for the hiring and firing of the executives. If the share price lags, management likely will be removed.

2) Compensation is another important reason for the management of a company to keep the stock price as high as possible. Most executives in a company receive part of their compensation with stock options, which gives the manager the right to purchase shares in the company at a set price. In general, the price that these options are set at are based on the most recent price of the company's shares when the option is granted to the manager. Over time, for this option to gain in value and increase the benefit for the manager, the price of the security must rise. This is why the issuance of stock options to managers is considered a good way to align the interests of the executives and the shareholders, as both will want to see share prices rise over time.

3) There are other reasons that a corporation is concerned with its price including the prevention of a takeover. When a company sees its share price fall the likelihood of a takeover increases as the company is relatively cheaper. If a takeover occurs, the management of the company is often let go, which again goes back to management protecting its own interests as no one wants to be fired.



Wall Street Update: Market close falls, snapped 3-day rally as Wal-Mart fell

The volatility of the market continues as Wall Street closed lower on Thursday, snapping the 3-day rally this week as Wal-Mart fell and dragged on the market after a slowdown seen in their latest quarter earnings while oil prices pulled back as well.

US market falls as Wal-Mart weighs while oil price also pulls back


Wal-Mart Stores Inc (WMT.N) fell 3 percent after the world's largest retailer reported a lower quarterly profit and gave a tepid sales outlook. The stock was the biggest percentage loser in the Dow index.

After the market closed, department store operator Nordstrom Inc (JWN.N) reported lower-than-expected quarterly profit and its shares sank 7 percent.


The oil prices slide lower as well after rallying in recent days. The oil prices pulled back as the benchmark Brent settled lower after data showed a build in U.S. crude inventories.



The Dow Jones industrial average fell 40.4 points, or 0.25 percent, to 16,413.43, the S&P 500 lost 8.99 points, or 0.47 percent, to 1,917.83 and the Nasdaq Composite dropped 46.53 points, or 1.03 percent, to 4,487.54.

The declines of the market was limited as IBM rose 5% on the back of an upgrade by Morgan Stanley to "overweight" stock.

The equity market's volatility means it's dangerous to go in now and with a lot of negative news surfacing, US can take comfort in the economic data that shows the number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to labor market strength.

According to Reuters, 8.1 billion shares changed hands on U.S. exchanges. This is below the 9.5 billion daily average for the past 20 trading days.


Oil madness

The oil madness is causing haywire in the market. Just look at the headlines of the financial news, journals, blogs, or research reports and you'll see how volatile the market is because of the oil price.



Here's a recap of some of the causes of the oil movement recently...

1) Oil price gain as news on Russia-Saudi meeting to discuss on oil production were released. The subsequent decision to lead a freeze production encouraged the oil rally.

2) Oil price dropped as concern over the participation of Iran. If Iran chose not to join in the production freeze, it'll not be sufficient to control the overwhelming supply of oil and thus the oil price's drop might continue.

3) Oil rally again once Iran made a remark on "supporting" the Russia-Saudi led production freeze even though the market was not sure the "support" equivalent to "action".

4) Oil eases again now that a U.S. government report showing a rise in crude stocks underlined the supply glut, countering optimism over this week's deal by oil producers to freeze output.

If you noticed, the oil price has never been so uncertain before but with the slowing global economy, it's easy to understand why. 

Oil fell towards $34 a barrel on Thursday, giving up an earlier gain. 

The U.S. Energy Information Administration said crude inventories rose by 2.1 million barrels last week, less than analysts expected.

But Wednesday's report from industry group the American Petroleum Institute said they unexpectedly fell.

Iranian Oil Minister Bijan Zanganeh met counterparts from Venezuela, Iraq and Qatar on Wednesday but did not say whether Iran would cap its output in keeping with the move by Russia and Saudi Arabia.

On Thursday, Iraq's oil minister said talks would continue between OPEC and non-OPEC countries to prop up prices.

Oil has collapsed from levels above $100 a barrel in mid-2014 due to excess supply, in a slide that deepened after the Organization of the Petroleum Exporting Countries later that year dropped its policy of cutting supply to boost prices.


So, where is oil heading next? What are the catalysts? Analysts are in for a ride here...it's a question of going up or down.

Wall Street Update: US stocks lower, dragged by Wal-Mart

Wall Street fell late on Thursday morning after a three-day rally. A slump in Wal-Mart weighed on consumer stocks and as oil prices retreated, sectors that drove the three-day rally gave up some gains.

Crude oil prices, whose performance has been tightly tied to the stock market, dropped from session highs after a report showed U.S. crude stocks rose last week. Brent crude was flat.

Wal-Mart (WMT.N) slumped 4.4 percent to $63.23 after the retailer reported a lower quarterly profit and gave a lackluster sales outlook. 


The stock was the biggest drag on the Dow and also dragged down other consumer stocks.

Reuters reported that limiting the losses were shares of IBM (IBM.N), which rose 5.7 percent to $133.35 after Morgan Stanley upgraded the stock to "overweight" and the company made another health-related acquisition.

At 11:11 a.m. ET, the Dow Jones industrial average .DJI was down 35.44 points, or 0.22 percent, at 16,418.39.

The S&P 500 .SPX was down 8.76 points, or 0.45 percent, at 1,918.06 and the Nasdaq Composite index .IXIC was down 33.08 points, or 0.73 percent, at 4,500.99.

A three-day rally, led by financial stocks, boosted the benchmark S&P 500 5.3 percent. But such has been the rout since the start of the year that the index is still down about 6.1 percent in 2016.

Economic data provided some relief. A report showed U.S. jobless claims unexpectedly fell to 262,000 last week, pointing to labor market strength that could keep a Federal Reserve rate hikes on the table this year.

Advancing issues outnumbered decliners on the NYSE by 1,529 to 1,309. On the Nasdaq, 1,248 issues rose and 1,238 fell.

The S&P 500 index showed six new 52-week highs and one new low, while the Nasdaq recorded 12 new highs and 21 new lows.

Thursday, February 18, 2016

Market Daily Report: KLCI closes higher as market reacted to oil rally

If this is not volatile, then what is?

Yesterday, the market was down slightly, and people blamed it on the possibility of Iran not joining the Russian-Saudi-led move to freeze production but today, the global market celebrated the "support" from Iran.

I was looking at the Wall Street rally yesterday, thinking to myself, there it goes again. At one time, the analyst blame the oil for the downtrend, then they said it's surging or rallying because of it. 

Anyway, the FBM KLCI started the day with a strong rally and reached its high of 1,685.65 for the day before some profit taking kicks in. Nevertheless, the benchmark index still close 15.70 points higher to 1,680.02 points.

FBM KLCI jumped 15.70 points to 1,690.02

News from Reuters said that US crude was up 2.1% at US$31.34 a barrel following a 7% jump on Wednesday after Iran voiced support for a Russia-Saudi-led move to freeze production to deal with the market glut that had pushed prices to 12-year lows.

While there has been some confusion as to whether 'support' equals action, oil traders are simply relieved that the world's fourth-largest holder of oil reserves is willing to cooperate.

On the broader market, Bursa Malaysia saw 1.67 billion shares worth RM2.10 billion traded. Gainers edge out decliners at 545 against 302.

Sam Engineering & Equipment (M) Bhd led decliners, while Kuala Lumpur Kepong Bhd led gainers. The top-active stock was Xidelang Holdings Ltd.

Asian share markets were up with MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.8 percent, Japan's Nikkei gained 2.28%, Hong Kong's Hang Seng increased 2.32% while South Korea's Kospi closed 1.32% higher. Nearer to home, Singapore’s Straits Time Index up by 1.73%.

Perhaps looking from recent trend, some of the things to watch out for in trading is the oil price, problems coming out from Europe, a slowing US and China’s economy. The combination of these factors could be the catalyst for a bear market.