STATE OF THE MARKETS

Stocks in choppy trading amid mixed earnings. US stocks were in choppy trading Tuesday, after mixed earnings reports but upbeat economic data. Consumer confidence and home sales beat estimates, sending Dow (+0.04%), Nasdaq (+0.06%) and S&P (+0.18%) higher. Dollar pierced the 94 handle, only to close slightly below, as yields continue to soar. Short term notes spiked higher than usual, with the 3Y gaining the most to 79 basis points – the highest in 19 months – in anticipation of non-transitory inflation.

In the commodities market, crude was trading in a tight range of $84.50 – $83.70/bl as traders await the EIA petroleum inventories report on Wednesday. Gold edged lower to $1,782/oz after punching $1815/oz the day before as more than $580b block orders flowed to US bond futures. Elsewhere, iron ore was little changed at $122 handle as the US infrastructure bill remains in limbo.

In the FX space, Aussie remains in the helm of demand across horizons, but sentiments seemed to deteriorate as Swiss and Sterling overtook Kiwi and Dollar in short to medium term demand. Long term remains unchanged. Markets look for earnings reports from Boeing (BA), Coca Cola (KO), eBay (EBAY), Ford (F), General Motors (GM) and McDonalds (MCD) to name a few. EIA petroleum status will be in the spotlight for oil traders.

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. We are long AUY (20% undervalued) with dividends yielding 2.75%, T (19% undervalued) at 8.20% yields and COG (CTRA) (14% undervalued) yielding 1.96%. CLVS is currently 20% overvalued with -7.19 z-score but Tudor Investment had stepped in recently and we decided to hold. We remain bullish with VIPS (43% undervalued with 5.59 z-score), GT (47% undervalued with 1.28 z-score) and CRON (18% undervalued with 9.18 z-score) while bearish GE (25% overvalued with 1.36 z-score).

For high probability stock picks, please use our Trading Central services.

Note: Cabot Oil & Gas (COG) recently merged with Cimarex Energy to form Coterra Energy (CTRA).

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.