Orix Capital Trading - U.S. Stocks Balanced with Energy Down and Biotech Up

    LONDON, ENGLAND, August 29, 2016 /24-7PressRelease/ -- The drop in energy stocks can mostly be put down to declining oil prices, which dropped nearly 4 percent after reaching a monthly peak last Friday.

Concerns over gluttonous Chinese fuel inventories, additions to U.S. rig counts and increased Nigerian crude shipments have all pushed prices down.

No surprise then that the S&P energy index dropped nearly 2 percent Tuesday, and was at the bottom of the ladder for the 10 main groups included in the benchmark index.

Most of the major corporations have reported earnings, so attention will now shift to the Federal Reserve's interest rates, and in particular Janet Yellen's speech set to take place at the annual world central bank convention in Wyoming on Thursday.

"There are two major blips on the radar right now on the trading floors and the investment house board rooms," said Director of Asset Allocation at Orix Capital Trading, Steve Rogers.

"Oil prices are volatile, and then we have the banker's summit in Jackson Hole. After Fed Vice Chairman Stanley Fischer's comments about job and inflation targets about to be met, there is every chance of a hike coming in the next few months, possibly even September."

As far as action on the trading floor is concerned, money is going on a 20 percent chance of a rate increase next month. That's an 8 point increase from last Thursday. The majority view is that the hike will come at the end of the year, with December taking a 50 percent pricing, up 5 points.

Medivation's takeover by Pfizer last week boosted the biotech sector. The cancer drug specialists saw a 25 percent jump in their shares after the $15 billion buyout. It was the biggest player on the Nasdaq, and lifted the biotech index on the exchange by 3 percent, the best daily performance for two months.

Over 70 percent of the 480 firms in the S&P 500 have performed over and above analysts' projections, even if overall earnings are still on the decline this quarter by over 2 percent.

After gossip circulated regarding a possible takeover of U.S. chipmaker Intersil by Japanese company Renesas, the firms share prices surged nearly 20 percent.

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