Highlights

State of The Markets

Author: MFMTeam   |   Latest post: Fri, 9 Apr 2021, 9:19 AM

 

Equities Surged Higher Amid Dovish Feds

Author: MFMTeam   |  Publish date: Fri, 9 Apr 2021, 9:19 AM


STATE OF THE MARKETS

Equities surged higher amid dovish Feds. Global equities surged higher on Thursday, with Dow (+0.17%) and S&P500 (+0.42%) hit record high, while FTSE100 (+0.83%) and Nikkei (+0.57%) climbed higher, after Feds Chair Jerome Powell left a dovish remarks in the IMF discussion, in light of the increasing jobless claims in the US. The benchmark 10Y yields eased further, from 1.68% to 1.63%, after markets grasped that Feds will be accommodative for a while.

Crude remains relatively unchanged with flat trading, with selling pressure below the $60/bl mark, after traders were spooked with OPEC+ decision to hike crude supply for May to July. Gold managed to stage a rally, after easing yields sent the metal higher, to close above $1,755/oz for the first time in two weeks, forcing King Dollar to retreat further.

The Dollar index (DXY) fell to the lowest in two weeks, around 92 level, benefitting Kiwi in the short and medium term accounts, as investors hedged with the safe haven Swiss and Yen. Euro remains supreme to Sterling as the Queen’s currency was sold across the board. At this point, FX traders seemed bearish, after heavy profit taking continue to dominate the UK equities.

OUR PICK – No new pick.

No new pick going into weekend. What caught our attention this time, is the heavy liquidation in the UK equities markets as price climbed higher. The more outflows than inflows, suggested that long term investors are less bullish despite dovish central banks, especially the Feds. On top of that, there had been chats in the markets that BoE will move into negative yields to help support the UK economy which is the base case for Citibank. However, rapid improvement in the public health as the country has inoculated 1/3 of its population, ahead of the US, Europe, and Japan may suggest that the rate cut will not be this year. Any indication of otherwise, will keep Sterling under pressure in our view.

Trades updates: MRO remains active and stop revised to $11.80,  KR had an early exit as price closed above $36.80 on Tuesday(Apr 6th) though we continue to see selling interest below $37.60, Crude sell limit @ 60.50/80 was filled and will ride the weekend, we have entered EUR/JPY at market and cancel the sell stop @ 129.70,  we remain bullish SIRI and prefer buy on dip around $6.10/20.

To our Muslims friends that will observe Ramadhan next week, we wish “Ramadhan Kareem”.

Have a great weekend.

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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Markets On Defense Amid Feds Minutes

Author: MFMTeam   |  Publish date: Thu, 8 Apr 2021, 9:25 AM


STATE OF THE MARKETS

Markets on defense amid Feds minutes. Markets continue to be at an impasse on Wednesday, as investors battled between strong economic growth and rising interest rates after Feds released its minutes.  Dow (+0.05%) and S&P500 (+0.15%) edged higher, while Nasdaq (-0.07%) and Russel 2000 (-1.60%) headed lower in a session led by communication, energy and financial. Utilities, consumer staples and IT still led the month as yields trending lower. The benchmark 10Y yield was as high as 1.78% last week before it fell to as low as 1.63% on Wednesday and settled around 1.68% as New York closed. 

Crude has been in the limbo for the past two weeks, trading within $62 – $57.20/bl band, as dealers continue to absorb orders on lower bids, amid the demand concerns come May when OPEC+ decided to hike supply. Gold returned to selling pressure as short-term trader took profits of the table. The yellow metal closed below $1,740/oz on a moderate volume.

In the FX space, safe haven Swiss seized the helm of demand across the board in the least expected move as markets ran on defense. King Dollar and Yen advanced further in the demand territory as to what appears to be a risk-off mood, after the commodity currencies were sent to the back burner for the short and long term accounts. The risk off appears imminent as Euro continues to overbid Sterling. If this trend continues, we might see a heavy exodus from equities soon.

OUR PICK – SIRIUS XM (SIRI, NASDAQ)

Low risk, high reward. When satellite radio was introduced back in the 90s, Sirius XM was as much a hype as Tesla is today. The stock went from $6 to almost $70 in over 5 years after its debut in 1995. As the craze faded, and people realized it’s still just a radio, price plummeted to less than a Dollar. In the last 10 years, it’s probably the most boring stock of all time with only 15% institutional participation. However, recent earnings that beat analysts estimates, propped price from $6 to $8 with only 30 cents risk per share in just a week.

The only problem was the company made more revenues, yet earn less income; hence the negative sentiments. But bear in mind that this is a 25 year old company that is trying to re-invent itself in a niche market. Recent pick-up in music streaming demands and new channels with Disney may see the company prosper. The dividend yields is less than 1% but it’s increasing for the past 5 years. We like this stock.

 
 

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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As Markets Wait And See…

Author: MFMTeam   |  Publish date: Wed, 7 Apr 2021, 9:20 AM


STATE OF THE MARKETS

As markets wait and see. Despite stronger jobs openings and higher IMF’s global GDP forecast, major US equities indexes, Dow (-0.29%), S&P500 (-0.10%) and Nasdaq (-0.05%), closed lower for Tuesday. Ahead of Q1 earnings reports, investors were seen on defense in bidding utilities, real estates and consumer staples; while on the sideline for healthcare, industrials and technology sectors. Meanwhile, moderate flows to bonds was also observed as the 10Y yields edged lower from 1.71% to 1.66%.

Crude staged a short lived rally to as high as $60.80/bl, before demand concerns pressed the black gold lower and settled below $59.20/bl. Gold on the other hand, advanced further above $1,743.50/oz after Dollar fell to the lowest level in two weeks on moderate volume.

The Dollar index (DXY) spot closed lower than the futures (DX), circa 92.30/35 mark, as medium term investors ran towards the safety of Swiss and Yen, while bidding for the high beta Kiwi. Euro finally managed to overbid Sterling and staged a rally in EUR/GBP in a quiet week for the Queen’s currency. The rest of the week seemed to be the battle between Dollar and Loonie as the duo wrestle in PMIs and employments figures.

OUR PICK – EUR/JPY

Riding the block orders. A block orders worth $11.2 million of EUR/JPY futures at ¥130.60 took place in the London session on Tuesday, though not huge, signaled an approaching long term supply area for the pair. On the monthly chart it can be observed that the pair is facing a long term resistance in its advance. Nevertheless, chart formations suggest that an upside risk is still present, for the pair to test ¥131 level. Sell limit at ¥130.70 or sell stop at ¥129.70 is our preferred  strategy for the short to medium term. An open target is also viable to take any long term downside risk in our view. We would cancel the sell stop once the sell limit is filled.

 
 

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 Hit New High Amid Stronger NFP

Author: MFMTeam   |  Publish date: Tue, 6 Apr 2021, 9:24 AM


STATE OF THE MARKETS

Stocks hit new high amid stronger NFP. Stronger than expected US employment figure released on Friday, kicked the markets opened by sending major indexes to a new all time high for Dow (+1.13%) and S&P500 (+1.44%), while Nasdaq (+1.67%) broke last month high. The US10Y yield edged lower, but still above 1.71%, after short sellers bought and took profit for the quarter.

Crude continued to be under selling pressure, closed below $58.80/bl, after traders were spooked with OPEC+ decision to hike production from May to July, instead of rolling over the quota. Gold was in the limbo, after some closed markets made the yellow metal finished with bearish indecision below $1,728.50/oz. A rising yields would certainly keep the metal under selling pressure and favor the Greenback.

In the FX space, King Dollar seemed to maintain its position with investors seen to seek short term safety in the safe-haven Swiss and Yen. Rebound in the high beta commodity currencies are more likely a repositioning as investors trimmed their USD shorts to the lowest in a year. The battles between Euro and Sterling continues.

OUR PICK – Crude Oil

Under selling pressure below $62.00/bl. OPEC+ decision to hike production output from May to July, spooked investors that were already pricing a production rollover. On top of that, renewed lockdowns in Europe and South Asia are dampening demand, though faster economic recovery in the US might buoyed the commodity. Any report of rising inventories would send price lower. Dealer is currently supporting the black gold, albeit on lower bid, amid the selling pressure. We favor sell on rally with $62.00/bl stop.

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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All Green For Good Friday

Author: MFMTeam   |  Publish date: Fri, 2 Apr 2021, 9:18 AM


STATE OF THE MARKETS

All green for good Friday. US stocks closed in the green Thursday, with S&P500 (+1.18%) made a new all time high above 4,000 mark, while Dow (+0.52%) and Nasdaq (+1.76%) climbed higher; led by tech stocks, real estate and energy in a short week for the Easter Sunday. Dollar was sold, and the 10Y benchmark retreated 10 basis points from 1.78% to 1.68% after markets bite that Feds will be dovish for a while.

Crude rebounded higher, above $61.45/bl, after being battered for two days by demands concerns in Europe and South Asia. OPEC+ decision to roll over the production quota for a month or two, while talks of increasing supply by Saudi’s might set a new selling pressure on the black gold. On another note, lower yields and Dollar, sent the yellow metal gold higher, breaking $1,730/oz as of this writing, but remain under short and medium term downtrend.

In the FX space, King Dollar lost its reign in the short and medium term. Renewed optimism on the global economy for the second quarter, sent Kiwi to the helm of demand in the short and medium term, along side Aussie and Sterling. Loonie weakness was observed in the short term as crude downside remains while Euro remains relatively unchanged across the board. Markets confidence is seen elevated as volatility index (VIX) dived below 17.50, the lowest in 14 months, in line with demand for the Swiss and Yen. For now, markets is waiting on NFP figures on Friday.

OUR PICK – No new pick.

No new pick going into weekend. Markets closed Q1 with a bullish tone, albeit on heavy hedging through bonds and precious metal; plus quite some flows to cash as well as cryptos. Risk remain elevated that rising yields will spark more demand for Dollar, though some investors were seen going into higher yielding dividend stocks and corporate bonds on some risk. Demand for small and mid cap growth stocks will dominate the equities markets in the next 4 – 6 weeks, in our view. April is 2/3 of the time in 25 years, is the worst month for USD versus CAD, so if history repeats itself, then we should see more demand for Aussie and Kiwi as well as precious metals.

Trades updateEUR/USD reached medium term TP2, MRO remains active as we expect crude weakness to continues pressing oil stocks lower, USD/CAD sell stop was filled and we have exited early going into NFP, Silver has reached medium term TP1 and a dime to TP2. Kroger remains active as long as daily price closed below $36.80.

To our Christians friends, have a good Friday and Easter Sunday. Have a wonderful weekend.

 
 

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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Equities Mixed Amid Uncertainties in Biden’s Plan

Author: MFMTeam   |  Publish date: Thu, 1 Apr 2021, 9:19 AM


STATE OF THE MARKETS

Equities mixed amid uncertainties in Biden’s Plan. Global equities closed the month and quarter on mixed tone Wednesday as Biden’s new infrastructure spending plan sparked some uncertainties in the markets. Though Nasdaq (+1.54%), and S&P500 (+0.36%) climbed higher; Dow (-0.26%) and FTSE UK (-0.86%) edged lower. Nikkei (+0.72%) climbed higher as of Tokyo’s afternoon, after Tankan survey showed Japan’s business mood turned positive in Q1.

Crude continued to be under selling pressure, closed below $56.20/bl, after OPEC+ lowered 2021 demand forecast, amid the renewed lockdowns in Europe and South Asia. On a positive note, gold rebounded higher in the futures markets, above $1713.80/oz, after month end Dollar selling sent the Greenback lower.

King Dollar retreated further in the demand territory, though remain bid in the medium and long term accounts. Euro and Sterling managed to overbid Aussie and Kiwi in the short term, though medium to long term remain relatively unchanged. Long term investors turned less bullish as safe haven Swiss and Yen was more in demand than Aussie and Kiwi. At this point, markets doubt how’s the plan that has failed twice, during Obama and Trump, would survive in Biden’s hands.

OUR PICK – A Second Revisit to Kroger (KR, NYSE)

Institutional unloading. The past few weeks have seen heavy institutional unloading, as stocks rotation took place; with TME, Viacom, Discovery being among the latest. Defensive Kroger was not excluded, as yesterday the stock took a sudden plunged of more than 4%, after guidance of a lower EPS estimate than consensus, triggered a sell-off in this 90% institutionally owned stocks. Dividends is also lower at current price, around 2% compared to 2.16% when we first revisit this stock in February. (Read more)

After Kroger managed to reach all terms targets; at this point, we see risk of a short to medium term pullback. Long term remains a buy in our view.

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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