STATE OF THE MARKETS

Small caps lead stocks higher. US stocks open strong on Monday, after continuing better than expected earnings reports, led by Russell (+2.65%) followed by Nasdaq (+0.63%), Dow (+0.26%) and S&P (+0.18%). Risk sentiments were stable as the 10Y yield was little changed since Friday, circa 1.55%, with Dollar (DXY) back below the 94 handle after a spike on month end demand.

In the commodities market, crude continued to firm above $84/bl after OPEC+ was expected to retain production quotas in its meeting this Thursday. Gold pared its earlier losses, as bidders continue to push the metal back above the $1,800/oz barrier ahead of Fed’s meeting on Thursday. Elsewhere, iron ore dropped to $102.10/tn after markets expected the impasse in US infrastructure bills would linger.

In the FX space, Sterling and Dollar were seen synching in short to medium term accounts, signaling possible change in short to medium term trends. Long term investors seemed more cautious as Swiss advanced further in the demand territories alongside Dollar in the short and medium term accounts. Markets look to auto sales and more earnings reports from Estee Lauder (EL), Lyft (LYFT), Pfizer (PFE), Ralph Lauren (RL) and Under Armour (UA) on Tuesday.

OUR PICK – No New Pick

No new picks as we had three losses in a row. It will be an interesting week to watch as the FOMC meeting will come prior to the NFP release. US employment figures are expected to improve with less jobless claims (285k vs 299k), more jobs added (450k vs 194k) and lower unemployment rate (4.7% vs 4.8%). Feds should be able to at least start tapering in light of these expectations that markets are already priced in. In our view, any deviation would send Dollar in a tailspin.

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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.