STATE OF THE MARKETS

Markets cheered on Biden’s policies. Global markets finished higher Wednesday as President elect Joe R. Biden was sworn into office, taking a new era of policies from climate change to pandemic aid. Major US indexes stroked new highs with growth stocks leading the way, while more than $300 billion flows into the US treasury as yield seeking investors flown to safety first. The 10Y yield remain above 1.05% while more demand were seen in the shorter dated 2Y notes bearing 0.13%.

Crude continued its upward trajectory, reaching $53.80 in the futures market, before settled lower, below $53/bl as news hit the wires that India’s oil import hit 3 year’s high in December trade, while China import rose 7.3% for the last year despite the corona pandemic. Gold surged higher, closed above $1,870/oz in the spot, and slightly higher in the futures markets; implying greater demand as investors seek hedge against inflation.

Dollar retained bidders albeit lower in the medium term, as uncertainty looms over the approval of the new stimulus from the Senate. Loonie jumped to the driver’s seat in demand as the central bank of Canada stay put on its rates, while Sterling saw a dent on profit taking as more than $270 million worth of block orders hit the futures market.

OUR PICK – Pfizer Inc. (PFE, NYSE)

If already bought, hold.  When Pfizer first announced a partnership with the German’s BioNTech back in early April last Year, the stock went overdrive and rose more than 35% in less than a year. Heavy institutional bidding was seen back in September when the stock was trading for $36.00/50 a share. Berskshire, BlackRock and Bank of Nova Scotia doubled their investments, while Natixis increase their holding by five folds. On the other hand, Goldman Sachs and Nordea took some 50% off the table.

Now that the stock is about to reach 50% discount from its recent low and high, we believe bidders are back to secure some dividends payable ($0.39/share, 4.27% annualized) in early March. With ex-dividend date of January 28th approaching, we expect to see some action in the next few days. In the short to medium-term, there is still risk to the downside as long as price closed below $37.00 to test $36.00 and $35.50 where we expect heavy bidding. Alternatively, buy on stop as price move above $37.20 with $36.00 as a stop loss for the long term.