Daily Stock Market Update: Crude Oil Bounce Supports Risk-Taking – Jan 27, 2016


Crude oil made yet another rebound yesterday, easing fears of an industry slump and allowing risk appetite to return to the financial markets. US equities were able to close the day in the green, with the S&P 500 index up by 26.55 points to 1,903.63 (+1.41%) and the Nasdaq up 49.2 points to 4,567.7 (+1.09%).

The S&P 500 VIX, which is considered a gauge of market uncertainty, fell 1.65 points to 22.50 (-6.83%) to indicate that investors had a higher appetite for risk.

WTI crude oil is back above $30/barrel while Brent crude oil recovered above $32/barrel, even as the American Petroleum Institute recorded an increase of 11.4 million barrels in stockpiles. The US crude oil inventories report from the EIA is due today and a rise of 3.8 million barrels is eyed.

Apple revenues missed expectations, iPhone sales slowed

Apple released its much-awaited earnings report in yesterday’s US trading session, revealing that its revenues for the period missed forecasts as iPhone sales slowed. In addition, Apple warned that it might actually post its first drop in revenue since the 2009 recession.

AAPL shares slipped 2.9% to $94.70 in the after-hours trading, as the quarterly revenue for the reporting period was up only 1.7% from a year ago. This marked the company’s slowest pace of revenue growth since the June quarter of 2013. The company indicated that iPhone sales increased by less than 1% from a year earlier, its slowest pace of annual growth for the device, which accounts for two-thirds of the company’s revenue.

Asian markets recovering from Tuesday slump

Equity indices in Asia are currently in the green after Chinese stock markets slid close to 6% again on Tuesday, reviving fears of a meltdown in the world’s second largest economy. The Hang Seng index is up 178.20 points to 19,039.00 (+0.94%), the Nikkei is up 427.33 points to 17,136.23 (+2.56%), and the China A50 index is down only 57.51 points to 8,738.35 (-0.69%).

Earlier today, Australia reported a 0.4% increase in its quarterly CPI for Q4 2015, higher than the projected 0.3% gain but lower compared to the previous period’s 0.5% increase. The S&P ASX 200 index is down 50.26 points to 4,956.30 (-1.00%).

Investors are taking it easy with their trades for the time being, positioning and reducing their risk ahead of the FOMC statement in the upcoming US trading session.

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.