STATE OF THE MARKETS

Stocks mixed as investors digest NFP. US major indexes, Dow (-0.76%) and S&P (-0.34%) closed lower on Tuesday, while Nasdaq (+0.07%) made another record high, in a cautious trading following the three day Labor Day holiday weekend. Mixed sentiments were evident as treasuries were lower, sending yields higher, with the 10Y benchmark approaching the 140 basis points.

In the commodities market, crude slid lower on concerns of further delta spreads that could ruin economic recovery. The black gold settled around $68.45/bl as New York closed. Rising yields sent gold lower, as investors digested employment figures that might not change Fed’s decision to taper sometime in Q4. The precious metal finished below $1,800/oz after advancing for four weeks.

In the FX space, King Dollar regained demand in the short and long term accounts, while ousting the Loonie, as sentiments remained in mixed territory. Aussie and Kiwi, however, retained the bids in medium to long term accounts while Swiss and Yen were on offer. It seems that markets are still digesting last week’s NFP figures.

OUR PICK – No New Stock Pick.

No new stock picks as we are at maximum equities exposure. Currently we are holding 8 stocks – 7 longs and 1 short – and have approached maximum equities exposure. We are long AUY with dividends yielding 2.80%, T at 7.59% yields and COG yielding 2.48%.

CLVS is currently 12% overvalued with -7.19 z-score but trading central projects a rebound towards 5.62-5.87 where we will most likely close our positions.

We remain bullish with VIPS (33% undervalued with 5.59 z-score), GT (47% undervalued with 1.28 z-score) and CRON (16% undervalued with 9.18 z-score) while bearish GE (26% overvalued with 1.36 z-score).

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.