Highlights

State of The Markets

Author: MFMTeam   |   Latest post: Fri, 23 Jul 2021, 9:46 AM

 

Rally Stalled On Soft Jobs Report

Author: MFMTeam   |  Publish date: Fri, 23 Jul 2021, 9:46 AM


STATE OF THE MARKETS

Rally stalled on soft jobs report. US stocks’ rally for the past two days were stalled, with Dow (+0.07%), Nasdaq (+0.36%), and S&P (+0.20%) hitting a ceiling, after initial jobless claims increased 51k to 419k compared to 350k expected. The signs of a wobbly employment sector, sent the 10Y yields down to 1.24% before settling higher at around 1.28% as Dollar (DXY) dived to the 92.50 mark before bids emerged to close higher at 92.85.

In the commodities market, crude futures staged its third day rally, testing the $72/bl barrier, after Russia pledged to ban gasoline export so as to curb supplies and control price. Gold remains in firm bids, closed above $1807.20/oz as markets see that Feds might not be able to taper and raise rate soon enough, given current employment sector’s conditions.

In the FX space, Kiwi was seen synching in demand across all time horizons, while Euro was on offer. Long and medium term accounts seemed playing it safe as Swiss and Dollar led in demands, with Loonie and Yen; while Euro, Sterling and Aussie remained offered. A light US economic calendar on Friday, may send Dollar back on offers while Euro, Sterling and Loonie back on bids.

OUR PICK – No New Pick

No new pick as we had three losses in a row. As we would not have any new picks until after the next NFP in August, we will continue to report funds flow more frequently than usual. As of last Wednesday, long term investors continue to liquidate US equities holding netting an outflows of -$4.35 billion and move $1.14 billion into foreign equities. Money markets had an inflow of $1.90 billion and the rate of inflows into US bonds is now about $5.07 billion a week. Apparently, at this point in time, long term investors are using every rally to book profits.

Trades updates:  We will continue to accumulate AUY as the stock now pays dividends yielding 2.57% at current price, we remain bullish T and will accumulate as dividends yields now at 7.43%, we remain bullish COG and will accumulate as dividends yields now at 2.80%, we remain bullish CLVSVIPS while bearish GPROAPA, and GE. (Note: APA pays 0.55% while GE’s dividend yield is at 0.31% and CLVS, VIPS and GPRO currently does not pay any dividends)

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.

 

 

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Stocks Climb Higher As Fears Subside

Author: MFMTeam   |  Publish date: Thu, 22 Jul 2021, 9:39 AM


STATE OF THE MARKETS

Stocks climb higher as fears subside. US stocks climbed higher on Wednesday, with Dow (+0.83%), Nasdaq (+0.92%), and S&P (+0.82%) , including Russell (+1.81%) pared last week’s losses, after more positive earnings results were reported from Dow member companies. Bond prices continue to fall, sending yields higher, with the 10Y benchmark now back in the 1.30% mark.

In the commodities market, crude futures staged further rally from dip buyers, settling price above $70.30/bl as New York closed; even though US crude inventories reported an unexpected rise of 2.1 million barrels last week. Gold pulled back further as risk appetite improves and higher yields attract more investors to the US bonds. The yellow metal settled around $1,803.30/oz as New York closed.

In the FX space, risk-off remains on the cards for medium to long term accounts as Yen, Dollar and Swiss led the demand while the comdolls, Euro and Sterling were offered. Short term traders seemed to take advantage of the oversold high beta currencies, to bid the bargains and offer more Dollars and Yen. ECB meeting Thursday may remain as dovish as expected, while US jobless claims would give clues to the employment sector of the US economy.

OUR PICK – No New Pick

No new pick as we had three losses in a row. Losses is part of the game that even professionals have to embrace. No exceptions. Our strategy remains intact but sudden change in market dynamics is not something we sometimes can foresee in advance. That’s why we had losses in AUD/CHFXAG/USDEUR/USDUSD/CAD and more recently AUD/CAD. These losses happened in a row and as part of our risk management strategy, we would not have any new picks until after the next NFP in August.

Trades updates:  We will continue to accumulate AUY as the stock now pays dividends yielding 2.50% at current price, we remain bullish T and will accumulate as dividends yields now at 7.46%, we remain bullish COG and will accumulate as dividends yields now at 2.72%, we remain bullish CLVSVIPS while bearish GPROAPA, and GEXAG/USDEUR/USD and AUD/CAD were stopped out. (Note: APA pays 0.54% while GE’s dividend yield is at 0.31% and CLVS, VIPS and GPRO currently does not pay any dividends)

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.

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Stocks Rebound As Earnings Unfold

Author: MFMTeam   |  Publish date: Wed, 21 Jul 2021, 9:53 AM


STATE OF THE MARKETS

Stocks rebound as earnings unfold. US stocks staged a rebound on Tuesday, with Dow (+1.62%), Nasdaq (+1.57%), and S&P (+1.52%) , including Russell (+2.99%) all up in the green as more corporate earnings topped Wall Street forecasts. Industrials (+1.84%) , financials (+1.76%) and energy (+1.72%) are the top three beneficiaries of the rebound as demand for bonds receded. The 10Y benchmark fell to as low as 1.13% before settling higher around 1.22% as New York closed.

In the commodities market, crude futures stabilized above $66.75/bl after selling pressure stopped as short sellers took profits off the table. Gold edged lower, closed below $1,810.05/oz, as yields seeking investors ran to Dollar in the last two sessions.

In the FX space, risk-off still dominates the medium to long term accounts as Yen, Dollar and Swiss led the demand while the comdolls, Euro and Sterling were offered. Demand for Dollar remained elevated in the short-term accounts, however, as US stocks suffered heavy liquidation on rally. Unemployment claims and US crude inventories will be on heavy watch as markets try to gauge the economic recovery.

OUR PICK – Cronos Group (CRON, NASDAQ)

Long term looking bullish. The last two trades on CRON didn’t quite work as planned. In January it was only on breakeven and the buy stop in April didn’t get filled. Now the price is looking undervalued by about 20% according to S&P GMI, which put the fair value around $9.00. In the short-term, however, the risk remains for the stock to drop further to $6 on the last frontier of 13% Fibonacci retracement from 2020’s low to 2021’s high. Medium to long term is looking bullish in our view as CRON approaches the next earnings report on Aug 4th.

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.

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Dollar Buoyed As Sentiments Plunged

Author: MFMTeam   |  Publish date: Tue, 20 Jul 2021, 9:11 AM


STATE OF THE MARKETS

Dollar buoyed as sentiments plunged. Global equities plummeted on Monday after concerns over rising spreads of delta covid variants forced long term investors to continue taking profits off the table. Major indexes in the likes of Dow (-2.09%), S&P (-1.59%), FTSE (-2.34%) and Nikkei (-0.32%) plunged deep in the red as investors ran to safe haven Dollar for capital safety. More than $290 billion worth of block orders in US bonds hit the futures exchange as the 10Y benchmark yielded below 1.20% – the lowest in five months.

In the commodities market, crude futures dived below $65/bl, as investors saw demand might not recover as expected after OPEC+ decided to boost production despite rising covid cases globally. Gold dived to $1,795/oz briefly before bidders emerged and settled higher around $1,811/oz amid concerns that Feds might not be able to raise rate as covid cases continue to climb.

Flight to safety saw Yen seized the helm of demand across all horizons in FX markets, with Swiss and Dollar following the lead, while the comdolls were sent to the back burners. Risk off was obvious as more funds flowed into Europe than the UK, sending EUR/GBP rate to the highest in six weeks as fear and greed index hit the lowest in 12 months.

OUR PICK – AUD/CAD

Turn around in long term sentiments. AUD/CAD was bearish for a while until last Thursday. Friday and Monday indicated a turn around in long term sentiments that also synchronized with medium and short term. The bottom is most likely in place for AUD/CAD.

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.

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Yields Fall As Safe Haven Flows

Author: MFMTeam   |  Publish date: Fri, 16 Jul 2021, 9:59 AM


STATE OF THE MARKETS

Yields fall as safe haven flows. Major US stocks indexes closed mixed on Thursday, with Dow (+0.20%) in the green, while S&P (-0.30%) and Nasdaq (-0.70%) closed lower; after unemployment claims came out as expected and investors flock to bonds safety, benefitting the Greenback. The 10Y maturity continued to yield down from 1.35% to 1.30% as New York closed. 

In the commodities market, crude futures edged lower, closed at $71.65/bl, after reports showed rising demand concern and OPEC+ still in limbo on production quota. Gold edged higher, closing above the $1,825/oz mark, as some investors do not see Feds ability to raise rates anytime soon, given the size of the balance sheets and debt ceiling limit at the end of this month.

In the FX space, long term investors remained cautious as demand for Swiss and Yen remained elevated, in continued hedging with higher yielding Kiwi and Dollar. Safe haven flows continue to dominate demand across the board as Yen strength continues. Crude weakness sent Loonie on offers across all horizons, supporting mainly Euro and Sterling. Markets look forward to seeing the RBA and ECB meeting next week to decide the next path for Aussie and Euro.

OUR PICK – No New Pick

No new picks going into the weekend.  We continue to see this week, ending 7/7, that long term US investors continue to cash out ($3.08b) from domestic markets and send over $0.66b to foreign equities. More than $30.7b flowed out of short term money markets while close to $4.8b flowed into taxable bond funds. More cash is coming out as markets prepare for the debt ceiling by the end of this month.

Trades updates:  We will continue to accumulate AUY as the stock now pays dividends yielding 2.41% at current price, we remain bullish T and will accumulate as dividends yields now at 7.32%, we remain bullish CLVSVIPS and COG, while short GPRO and APAXAG/USD and EUR/USD longs remain active, USD/CAD was stopped out and bearish GE.

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.

 

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Stocks Mixed Amid Falling Yields

Author: MFMTeam   |  Publish date: Thu, 15 Jul 2021, 9:46 AM


STATE OF THE MARKETS

Stocks mixed amid falling yields. Major US stocks indexes closed mixed on Wednesday, with Dow (+0.13%) and S&P (+0.12%) closed higher, while Nasdaq (-0.22%) and Russell (-1.63%) trended lower; after Feds reiterated its pledge to support the economy that will see temporary higher inflation. Feds reluctance to be firm on taper and rates, sent yields lower as investors demand more bonds. The 10Y maturity yielded down from 1.41% to 1.35% as New York closed.

In the commodities market, crude futures trended lower as of this writing, down to $72/bl as Saudi and UAE managed to work out a supply deal to balance the production and demand quota for the summer months as EIA reports showed that inventories were reduced more than expected. Gold continues to be on firm bids, past the $1,820/oz mark, as Fed’s remain supportive of current policy allowing yields to fall and inflation to rise for a while.

Falling yields sent Dollar on offers for the short and medium term accounts, while bids returned to Kiwi and Aussie. Traders and investors seemed cautious as demand for Yen and Swiss remained elevated across horizons. Euro and Sterling were all over the place as players repositioned themselves due to lack of data for the two economies. 

OUR PICK – General Electric (GE, NYSE)

Overvalued, technical sell. A corporate behemoth General Electric has been facing deteriorating earnings in the last few years, sending its price from the high of around $30 in 2016 to close to $5.50 early last year. Dividends cut from $0.24/share in Q3,2017 to $0.12 for three quarters of 2018 before further reduction to just a penny a share in Q4, 2018 until the last quarter. The company was highly leveraged with more than three times equity back in 2018 and the last few years saw debt being reduced as dividends being cut as the company tried to turn around. Currently 30% overvalued per S&P GMI metrics, making it fairly valued around $9.00 where we would buy again. 

 

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.

 
 
 
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