Analysis Of The Market

Posted on December 27, 2025

Analysis Of The Market

Analysis of the Market Out of the four sessions prior to Tuesday, the market index under consideration in the portfolio, Dow Jones Industrial Average, lost ground in three of those sessions. On Tuesday the Dow gained about 90 points while 80% of the 10 sectors advanced. The tech stocks have recently suffered some pullbacks resulting from worries that regulations in the industry would be increased. The investors here however gained confidence in the industry and it is evident in the performance of the market index (Divine, 2014). The Dow Jones Industrial Average closed at 16,264.23 on Thursday which represents a gain of about 40 points.

On Thursday morning, the Bureau of Economic Analysis issued its final report for the last quarter. The major indices responded with some level of dissatisfaction with the report causing the Dow drop in performance. This is in spite of the report revealing improved figures in the gross domestic product by 0.2% compared to last month. The Dow rebounded on news of significant initial jobless claims which represent the best figure in the last four months (Planes, 2014). The government wishes to have inflation within the economy.

This desire by the government is meant to encourage the flow and exchange of money from person to person so that levels of investments rise. The economy will be set to improve by this move. However, the government through the central bank are intending to increase the interest rates in a bid to curb the raising level of inflation. This is in contradiction to the wishes the government expresses. This would explain why commodities are sending mixed signals within the market.

The portfolio is performing below the initial investment injected to own the various shares that it consists of with the aim of diversifying and spreading risks as well as portfolio growth. The portfolio objective this week has been undermined by the top three biggest losers which command a decrease of 27.97% in the overall value of the portfolio. The most affected stock this past week was that of Caesars Entertainment. The portfolio shed nearly 2.5% of its value as at 2PM on Thursday when matched up to the value of the portfolio in the previous period. Whereas most shares in the portfolio remained relatively stable during the week, the aggregated lost value from the top three losers overwhelmed that of all gainers, hence the dull performance portrayed.

All gainers this week registered not very impressive results. They were four in total, that is, Coca Cola Company, Donaldson Company Inc, Delta Air Lines Inc and Microsoft in that order. Their respective gains are 1.83%, 0.86%, 0.63% and 0.46%. According to Cooper (2014), analysts see Coca Cola Company continue to grow perpetually if the global economy is back on track. The company has had a tough past fiscal year seeing that its global volume just grew by two percent.

On comparison with the S&P 500, the stocks appear to be underperforming the market index implying there is still potential for the stock to improve. The stocks nonetheless have been trading at a relatively stable price. The shares of Coca Cola would rank eleventh out of the thirty component stocks that constitute the Dow Jones Industrial Average. This is what a tally of the opinions of most analysts who work in most of the major brokerage houses would reveal. The stock would also claim the 164th position out of the 500 components constituting the broader S&P 500 market index.

This shows that most market and stock analysts have confidence in this stock and see the reliable potential the company has in future. Such a stock would be most preferred by long term or medium term investors who value the growth of their portfolio more. The shares of Donaldson Company, Inc. have increased and this could imply that the investors are slowly gaining confidence in the stocks of the company or with the management of the company. This comes after the company recently reported a drop in net profits by about 5%. There has not been much information regarding the company and this is probably why its shares are relatively stable from session to session of trading.

Delta Air Lines, Inc. has been registering a decline in its share market price over the two weeks prior to this week. The gain this week can be explained by the move of the airlines company to launch the access of international Wi-Fi to its customers who fly any of their aircrafts. The company will have all of these aircrafts Wi-Fi installed by June this year. It is also planning to finish installing this WI-Fi service on all its international fleet of aircrafts before the end of the next year. With more than three thousand daily flights, the company operates the largest fleet of aircrafts which are equipped with Wi-Fi.

Delta is saw the need to bring to reality customer wishes about their desired experience and it was for that reason the company invested billions of dollars. The investors are positive that the company is headed in the right direction as it continuous to be the industry leader. This boosts the confidence investors have in the shares of the company. It is also known that investors prefer stocks that repeatedly exceed the Wall Street expectations without risking a meltdown. Planes (2014) argue that the shares of this company are arguably destined for greatness.

Caesars Entertainment shed off the highest proportion yet in its share price in just a week. The company’s move to close down its Mississippi Casino could be the underlying factor that saw this poor performance. This comes after news that the company secured a casino licence in South Korea in a bid to expand its operations to the Asian market a means to diversify its operations and earnings as well as spread risks. The investors may have panicked and caught up in the middle as they try to figure out what the future hold in store for this company. The shares of R.R.

Donnelley & Sons Company traded at $17.30 on Thursday which is below their two hundred day moving average of additional five dollar cents. There were also reports that the company acquired Esselte. Acquiring the company would have negative cash flow effects and it could be for this reason the investors lost some confidence in the stock. In addition, little information about the company is within the domain of the investors and they would resultantly trade in a cautious manner. Reports about the real estate industry hit the market that revealed that home sales are the worst since October 2011.

Such kind of news would cause investors to get unsettled or comfortable holding onto the shares of the company since not many people are turning to buy homes. This is despite the reports that confirm that unemployment levels have dropped further as compared to last month. It is important to note that the shares of IEP appear to be the most unstable in the portfolio. They were the best performing stocks in the first two weeks and since then, the shares have been declining. Last week registered a slight drop however.

This could be an indication that the investors are slowly but surely gaining confidence in these shares and the performance of the company. The data chart below shows the previous week’s performance as at the close of trading on Thursday. Source : References Cooper, T. (2014, March 23). Coca-Cola: A Stock for Optimists . Retrieved from Delta Launches International Wi-Fi Access for Customers on its Aircraft.

Retrieved from Divine, J (2014, March 25). Dow Up 91, No Thanks to China: Melco Crown Keeps Plunging. Retrieved from Dow Analyst Moves: KO. Retrieved from Planes, A. (2014, March 25). Is Delta Air Lines, Inc.

Destined for Greatness? Retrieved from Planes, A. (2014, March 27). The American Consumer Is Keeping the Economy Alive. Retrieved from RRD Crosses Below Key Moving Average Level. Retrieved from RR Donnelley Announces Completion of Acquisition of the North American Operations of Esselte.

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