July 16th 2014 - July 18th 2014
Muhammad Aizat Ahmad Fauzi
Macroeconomics and World Events
During the period from July 16th to July 18th, there was some major world events occurred that affected stock prices in United States. First, the U.S Federal Reserve Chairwoman, Ms. Janet Yellen testified in front of the Congress that some stocks valuations for biotechnology, social media and small stocks are “substantially stretched”. On Thursday, Israel announced that they would invade Gaza in order to fight against Hamas, the ruler of Gaza Strip who has been accused of firing rockets into Israel territory. This tension might lead to a war between these two countries. On the other hand, Malaysian Airlines flight 17 was crashed in the eastern Ukraine. Official stated that all passengers including the crewmembers in total of 295 people died in that crash. All these events caused a huge drop in U.S market indexes especially after the top hit in Dow Jones Industrial Average (DJIA) on Wednesday, July 16th at 17,138.20 points. It fell down drastically on Thursday by 161.39 points and recovered again on Friday with the market closed for this week at 17100.18 points as the worries over those conflicts receded.
Delta Air Lines Inc.
Delta Air Lines fell along with other airline stocks on Thursday after a Malaysia Airlines plane carrying 295 passengers crashed in Ukraine. They released a statement saying they were avoiding parts of Ukrainian airspace. However the air crash had a huge impact on DAL. TheStreet Ratings team rates DELTA AIR LINES INC as a "buy". In addition, they informed that they have been channeling their effort to satisfy the needs of their clients, who have been suffering the effects of the reduction of flights between Caracas and Atlanta, measure announced one month in advance. Delta Air Lines Inc. shares fell 2.24% in last trading session and ended the day on $37.18. DAL gross margin is 34.50% and its return on assets is 21.90%. Delta Air Lines Inc. quarterly performance is 8.94%.
On July 15th, drug maker Mylan announced that they will acquire Abbott (Abbott Laboratories) generics business in mature markets outside the United States, and incorporated a new company in the Netherlands in order to reduce taxes. The transaction consideration is $ 5.3 billion. Under the agreement,…