STATE OF THE MARKETS

Dollar dropped amid falling yields. While US stocks climbed higher on Thursday as investors see lower rate hike in February, the Dollar has dropped near the 102 handle on repricing. The small cap Russell (+1.74%) climbed the most, followed by Nasdaq (+0.64%), Dow (+0.64%) and S&P (+0.34%) as investors continue to buy US treasuries. The shorter 2Y yields dropped further to 4.11% while the 10Y benchmark fell to 3.42% before New York closed.

In the commodity markets, Dollar weakness has benefitted major commodities with crude oil gaining more than 1% to settle near $78.50/bl while gold spiked past $1,900/oz as New York closed. Iron ore, however, stalled near the $121.20/tn barrier as short term traders took some profits before the weekend.

In the FX space, Yen, Euro and Aussie dominate the demand territories across the board while Sterling, Kiwi and Dollar were sold off in the long term accounts. Dollar, Swiss and Loonie were sold off in the medium term accounts while short term traders sold Kiwi, Dollar and Swiss.

On Friday, markets expected to remain bullish stocks as falling yields in the bond market called for the Federal Reserve to pause rate hikes at some points. Friday also marked the beginning of earnings seasons for Q4 2022 with banks and money centers to kick off earnings releases. United Health (UNH), JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), BlackRock (BLK), Citigroup (C), Bank of New York Mellon (BK), Delta Airlines (DAL) and First Republic Bank (FRC) will be of interests to investors, on top of import/export prices and consumer sentiments from University of Michigan.

** Starting the 16th of February, State of the Markets will be on hiatus until further notice. We thank our readers for your time. We hope to be back soon. **

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

STATE OF THE MARKETS

Stocks rallied ahead of CPI. US stocks rallied on Wednesday as investors turned optimistic on the CPI report scheduled on Thursday. Nasdaq (+1.76%), S&P (+1.28%) and Russell (+1.17%) made more than 1% gain while Dow (+0.80%) broke last week high as some cautious investors flock into bonds and send yields lower. The shorter 2Y dropped to 4.21% while the 10Y benchmark fell to 3.53% as the Dollar index struggled to float above the 103 handle.

In the commodity markets, crude oil jumped near $78/bl despite rising inventories as investors see higher demand from China after its border reopening. Flight to safety continued to press gold higher, near $1,886.50/oz, as New York closed. Elsewhere, iron ore continues its upward trajectory to hit $121/tn as investors continue to bid the commodity higher.

In the FX space, short term traders were quick to buy the oversold Yen but kept Swiss on offers alongside Kiwi and King Dollar. In the medium term, Dollar and Yen remained sold off while Euro and Swiss advanced further into the demand territories. Long term sentiments were little changed with more demand for Aussie and Sterling than Swiss and Kiwi.

On Thursday, markets may remain choppy as traders and investors positioned themselves for the inflation reports. CME FedWatch projects a 75% probability of a 25 points hike in February and a pause in March that may keep the floor in equities for now. Any upbeat surprise in CPI numbers today may spike the Dollar up and put pressure on equities. Earnings releases to watch include Taiwan Semiconductor (TSM) and Washington Federal (WAFD) as well as the latest US jobless claims and the much awaited inflation data.

OUR PICK – No New Pick

No new picks amid volatile markets. Markets don’t seem to favor our setup for now as we were stopped out on Gold and NZD/USD. We stay on the sideline for now.

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

STATE OF THE MARKETS

Stocks up as the Dollar steady. US stocks climbed higher on Tuesday after Fed’s Chair Powell didn’t provide any fresh clues as to the rate hikes plan. The small cap Russell (+1.49%) climbed the most, followed by Nasdaq (+1.01%), then S&P (+0.70%) and Dow (+0.56%) as the Dollar index steadied above the 103.20 barrier. Sentiments were a bit bullish as bonds lost bids, sending yields higher across the board. The shorter 2Y yields climbed to 4.25% while the 10Y benchmark jumped back to 3.62% as New York closed.

In the commodity markets, crude oil was firmed above the $74.80/bl barrier after the US government forecast higher global petroleum consumption in 2024. Investors continue to bid gold higher ahead of the consumer price index data on Thursday that may give a hint on the Federal Reserve’s hikes plan. The yellow metal settled around the $1,876.80/bl barrier as New York closed. Elsewhere, iron ore continues its upward trajectory to hit $119.70/tn as bidders continue to flood the metal markets after news of China’s reopening of its economy.

In the FX space, King Dollar remained sold-off in the medium and long term accounts, alongside Loonie and Yen, while short term traders were quick to bid the oversold Dollar alongside Euro. Yen and Swiss were sold off in the short  and medium term while in demand in the long term accounts.

On Wednesday, markets expected to be cautious ahead of the consumer price index data on Thursday that may provide fresh clues on the Federal Reserve’s hikes plan. Wednesday comes with a thin earnings calendar that has KB Home (KBH) to watch on top of the mortgage application index. EIA petroleum status will be in the spotlight for energy traders.

OUR PICK – No New Pick

We stay on the sideline for now. Markets don’t seem to favor our setup for now as we were stopped out on Gold and NZD/USD. We stay on the sideline for now.

Disclaimer: This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

STATE OF THE MARKETS

Stocks mixed amid falling yields. US stocks closed mixed on Monday as investors fully digested last week jobs and wage data that showed the Fed’s rate hikes were starting to slow the economy. Nasdaq (+0.63%) and Russell (+0.17%) climbed higher while Dow (-0.34%) and S&P (-0.08%) closed in the red as yields continue to fall in response to demand in bonds. The shorter 2Y yields dropped to 4.19% while the 10Y benchmark dipped to 3.51% as the Dollar index broke the 103 barrier.

In the commodity markets, crude oil held steady above the $74/bl mark as China reopened borders to boost demand expectation. Falling Dollar continues to push gold higher past $1,880/oz as investors speculate that the Federal Reserve might have to ease at some point this year. Elsewhere, iron ore benefits from weaker Dollar and China reopening helped buoy the commodity above $117.40/tn.

In the FX space, King Dollar was sold-off across the board and alongside the Yen and Swiss in the medium term. Short term traders were keen to demand more Euro, Swiss and Sterling while dumping Kiwi, Yen and Aussie. Sentiments were mixed.

On Tuesday, markets expected to be in choppy waters as investors geared up for the consumer price index this Thursday. Earnings releases to watch include Albertsons (ACI), TD Synnex (SNX) and Bed Bath & Beyond (BBY) as well as small business optimism index and wholesale inventories.

OUR PICK – No New Pick

We stay on the sideline for now. Markets don’t seem to favor our setup for now as we were stopped out on Gold and NZD/USD. We stay on the sideline for now.

STATE OF THE MARKETS

Stocks dropped on strong jobs data. US stocks erased earlier gains after news of strong jobs data. ADP employment report showed private employment rose significantly more than expected (235k vs. 150k), sending signals that the Federal Reserve may have to raise rates higher for longer. The tech-laden Nasdaq (-1.47%) fell the most, followed by S&P (-1.16%), Russell (-1.09%) and Dow (-1.02%) as flows to bonds receded, sending yields higher. The shorter 2Y jumped to 4.49% while the 10Y benchmark hit 3.77% as the Dollar index spiked past the 105.20 barrier.

In the commodity markets, demand concerns and Dollar strength pulled crude oil lower to $72.60/bl before bidder emerged to settle the black gold higher around $74.05/bl as New York closed. Speculation on longer and higher rates from the Federal Reserve put gold under pressure as the metal closed lower around $1,832.60/oz. Elsewhere, iron ore stalled around the $115/tn handle waiting for the next catalysts.

In the FX space, short and medium term sentiments were bullish as the Swiss pulled back in demand, while Aussie, Dollar and Loonie advanced into the demand territories. Sterling remained under pressure while Euro was in limbo across the board.

On Friday, all eyes will be on the non-farm payroll reports as any significant jobs drop and higher unemployment may fuel equities rally. Shall the opposite happen, we might see a stronger Dollar as markets speculate on a more aggressive Federal Reserves. Earnings releases to watch include Greenbrier (GBX).

OUR PICK – No New Picks

No new picks going into the weekend. After two weeks of small inflows into the US equities, this week reported outflows (-$5.1 billion) alongside the taxable bond funds (-$2.1 billion), while heavy flows into the short term money markets (+$57.8 billion). It seems that investors are convinced that the Federal Reserve is going to raise rates higher for longer and the employment data on Friday will set the tone for the short and medium terms.

Trades updates: 

Equities:  While WBA (12% undervalued, 5.12% yields) dropped on declining sales, SQ (about 10% overvalued with 3.88 z-score) and  CRON (31% undervalued with 19.32 z-score) were on firm footing this week. M (42% undervalued, 2.92% yields), VIPS (35% undervalued with 3.93 z-score) ), T (about fairly valued, 5.78% yields) and  AUY (11% undervalued, 2.06% yields) continue to climb higher this week.

FX & Commodities:  Crude oil reached TP1 for the second time before stopping out and we remained bearish NZD/USD.

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

STATE OF THE MARKETS

Stocks up amid flight to safety. US stocks closed higher on Wednesday despite flows to bond safety after release of the FOMC minutes that showed the Federal Reserve’s commitment to control inflation as they agreed to slow the pace of the hikes. The small cap Russell (+1.25%) climbed the most, followed by S&P (+0.75%), Nasdaq (+0.69%) and Dow (+0.40%) as yields dropped further on bond demand. The shorter 2Y drifted to 4.36% while the longer 10Y tumbled to 3.69% as the Dollar continued to hold steady above the 104.20 barrier.

In the commodity markets, crude oil continues to fall below $73.30/bl after news of demand concerns amid rising Covid cases in China. Flight to safety was also evident in gold that spiked to near $1,865/oz before settling lower around $1,854.05/oz as New York closed. Elsewhere, iron ore pulled back to $115.35/tn after breaking the $117.80 barrier as speculators took profits off the table.

In the FX space, short term traders were quick to sell the overbought Yen and Dollar while demanding the oversold Aussie and Loonie. Yen continued to reign in the medium and long term accounts while King Dollar and Loonie were sent to the back burner. Sentiments seemed bearish after the Swiss advanced further in the demand territories across the board.

On Thursday, markets may remain choppy as long term investors look to cash out on further rally in equities while short term traders may look to scoop some bargains as players continue to digest the Federal Reserve’s plan going forward. Earnings releases to watch include Constellation Brands (STZ), Walgreens Boots Alliance (WBA), Conagra Brands (CAG), RPM International (RPM) and Lamb Weston (LW) as well as the latest US jobless claims and ADP employment data. The EIA petroleum status report will be in the spotlight for energy traders.

OUR PICK – No New Stock Pick

No new stock picks amid volatile markets. Markets are in limbo trying to figure out the next move for the Federal Reserves. The minutes vowed for inflation control though members agreed to slow down the pace of the hikes. We stay on the sideline for now.

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.