Stocks Consolidate While Foreign Exchange Becomes More Volatile

Stocks were torn between the contrasting performances of the energy sector, supported by the rebound of oil, and the financial and health sectors at the end of last week.

The indices, which began the session slightly down, gradually strengthened until later in the day when they consolidated at the end of the session. In economic data sales of new homes increased 2.9% in May, during which time the average price reached a record according to the US Department of Commerce. However in contrast growth of the private sector in the United States slowed down in June.

Oil prices finished slightly up Friday, managing to recover a little at the end of a week of falls. As a result, the index of energy stocks in the S & P 500 recovered with a modest gain.

Foreign Exchange Update

In the foreign exchange market, the euro fell slightly against the dollar in early European trading on Monday, with traders opting for caution at the start of a week of busy schedule of economic indicators in the United States.

The Euro gained some ground against the Japanese Yen, at 124.91 yen for one euro – climbing to its highest level in three and a half weeks. The US Dollar also gained against the Japanese Yen.

At the beginning of last week, the dollar had slightly increased, reaching its highest level in three weeks against the euro, following comments of the Fed for continued monetary tightening by the US central bank. The rise in US interest rates makes the US Dollar more remunerative and therefore more attractive to investors.

For those who wish to transfer money there was still reasons to be cheerful, as exchange rates look set to benefit those who wish to invest or send money to Europe. The European area still looks uncertain, and it’s not clear on how the single currency will hold up over the summer months.

Published first at: http://www.stockpricetoday.com/stock-news/stocks-consolidate-while-foreign-exchange-becomes-more-volatile/.

Amazon Shows Its Hand With Whole Foods Acquisition

On the trail to world domination Amazon is now to take over Whole Foods in a whopping $13.6 billion dollar deal. For many years Amazon has been experimenting in groceries, without much success, this deal seems to suggest that the ecommerce giant has conceded that grocery shopping needs to have a mix and match of traditional local outlets and online ordering combined.

The Amazon share price reacted positively to the news, gaining a modest 3%. However, the best is still to come. The company will without doubt use this acquisition to get the model correct, and then begin to roll it out into new territories such as the UK.

In the UK leading grocery stocks fell with investors beginning to worry on the competition a giant such as Amazon would bring to their (until now) market. However, Morrisons share price gained, as they already have a deal in place to supply groceries for Amazon Fresh, a small test project in London. This leads many to think if they do decide to pursue this in the UK then that will be their takeover target.

Another advantage that Amazon have, compared to the main players in the UK, is that shareholders of Amazon do not expect dividend growth. They are perfectly happy to see revenue poured back into development, and as long as the share price appreciates everyone is happy.

In the UK most supermarkets share holders are dependent on dividends to see good long term returns from holding their shares. Prices have not shown steady growth in what is now a unstable sector, due to cut price stores like Aldi and Lidl take more and more market share. With such a large firm such as Amazon on their way to the UK, it would not be surprising to see some major moves from the UK firms to position themselves correctly for when the shake up of their industry happens.

Published first at: http://www.stockpricetoday.com/stock-news/amazon-shows-its-hand/.