Market and Industry Update - Weekending 7th March 2014
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Global indexes had an interesting week so far and as they look to end one of the most volatile periods for traders this year there appears to be little overall change across the board. The sharp sell off on Monday morning was predicted due to the breaking news on the situation with Russia and the Ukraine.
With the US and EU threatening harsh economic and financial sanctions not much has changed within the Crimea region. Tensions are still high and with Obama and Putin speaking at least twice and several other leaders making their thoughts heard. It is un sure as to how and when this situation within the Ukraine will cool down. What is for certain is that many European countries whose ties with Russia, specifically the UK and Germany are substantial, have both made statements suggesting they would be worse off if the proposed sanctions the United States are looking to implement get the go ahead. There are already visa sanctions being placed on the Ukraine and discussions with Russia regarding an economic pact and visa agreements has been halted with the European Union.
The MICEX, Russia's main index had heavy losses at the beginning of the week but looks set to calm by the close on Friday with only a 10% deficit over previous trading levels. Intraday trading saw the market slightly lower at 1,334.08. Bearing in mind that the entire index is now down 11.8% YTD the damage is not irretrievable with the main industry affected being the Oil & Gas sectors and the concerns over foreign ties and possible sanctions on Oil and Natural Gas exports from Russia.
The majority of global indexes have recouped from Monday and have stayed flat as everyone awaits some form of outcome or direction from the Ukraine, Russia and the United States.
Commodities initially spiked as the week started with both Crude Oil WTI and Brent adding 2-3% respectively on Monday. WTI closed down at $101.84 from a high of $105.34 earlier this week with Brent closing at $108.32 down from its 2% gains of $111.26 earlier in the week. It was a similar story with COMEX Gold and Silver both showing initial gains as the usual safe haven store was predictably positive, however a quick change in direction on Tuesday saw gains reversed and them both close out trading on Thursday back to their normal trading ranges. COMEX Gold for Apr delivery finished at $1,350.00 flat and COMEX Silver for May Delivery ended the day at $21.54.
Even with news updates confirming the dire situation in the Ukraine there were still some exceptional performances on the US markets, specifically the NASDAQ. Two of note are:
Pixel Works Inc . The High Definition Processing company announced that it had a major partnership with Apple Inc. and even though it relied on this for almost 10% of its revenues in 2013 the market decided this was worth over 87.5% increase in their share value pushing the stock to close at $9.00 with afterhours trading adding an additional 5.5% from a previous close of $4.80. The news did little for Apple who remained flat most of the week posting only a minimal 0.24% so far. Pixel Works has been linked with Apple's iTV a much anticipated arrival in the near future.
Plug Power Inc the makers of the GenDrive fuel cell had positive gains after the release of their share offering. Raising over $22mln from just under 4mln shares helped the stock continue a massive 3,600% increase over the last year with the stock going from $0.79 at the beginning of Dec 2013 to a 52wk high of $7.09. The stock closed at $6.36 on Thursday and looks set to benefit from a huge marketing campaign by Wal-Mark Stores (WMT:NYSE) and a $50mln order for almost 1,800 fuel cell units, hydrogen and a 6yr service contract. Shares of Wal-Mart were steady at $74.40 showing little gain on this news.
With only US Jobs data coming out today the week looks set to end quietly for the indexes and even with positive news from China regarding their Growth Index targets for 2014 (7.5% against 2012/3's 7.7% and inflation goals (3.5% set to compensate for price increases) there is little expectation of a rally for the last day of the week with everyone looking to developments in Eastern Europe to help settle the general concerns for the area and the affects it may have.
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DISCLAIMER The views, opinions, findings, and conclusions or recommendations expressed on this service are those of the author(s) and do not necessarily reflect the views of the Hexagon Capital Management.All market data within this release is for your general information and enjoys indicative status only. Hexagon Capital Management does not accept any responsibility for its accuracy or for any use to which it may be put. All share prices and market indexes delayed at least 15 minutes. 52 week high and low values are calculated from close price data.