STATE OF THE MARKETS

Stocks advanced as jobless claims fell. US stocks advanced further on Thursday, with Dow (+0.04%) and S&P (+0.30%) made record high and Nasdaq (-0.16%) edged higher, after reports showed that more workers are back to work as initial claims fell for three weeks in a row to 375k while continuing claims dropped from 2.98m to 2.88m cases. Dollar (DXY) edged higher, closed above the 93 handle as yields for the 10Y benchmark flirted around 135 basis points.

In the commodities market, crude futures edged lower on Dollar strength and settled above $69.05/bl as New York closed. Bearish sentiment hit the black gold market after IEA reported that Delta spread would slow global demand recovery. Gold, on the other hand, firmed at $1,752.75/oz, after easing inflation may delay Fed’s tapering beyond September.

In the FX space, demand for King Dollar returned in the short term accounts, after Fed’s overnight reverse repo facility hit a record of $1.08 trillion, as demand for Yen and Euro rose on risk-off sentiments. It seemed that investors are being cautious as demand for high beta comdolls eased, except for Loonie that may benefit from rising crude prices.

OUR PICK – No New Pick

No new picks going into the weekend. When major indexes are rising, yet equity funds report net outflows, that means smart money is cashing out and taking more profits off the table while they can. Liquid investments like money markets are always going to be preferred alongside the safe haven of treasuries. This week ending Aug 11th, domestic equity funds reported net outflows of almost -$4b while foreign equities reported net inflows of $1.03b. Taxable bonds received a net inflow of about $8.15b while short term money markets received close to $10.5b. That should say something about the state of the markets.

Trades updates:  We will continue to accumulate AUY as the stock now pays dividends yielding 2.87% at current price, we remain bullish T and will accumulate as dividends yields now at 7.39%, we remain bullish COG and will accumulate as dividends yields now at 2.73%, we remain bullish CLVS, VIPS and GT while bearish GE. We have closed GPRO and APA. USD/CAD was stopped out while Crude remained active. (Note: APA pays 0.53% while GE’s dividend yield is at 0.30% 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.