STATE OF THE MARKETS

Stocks higher ahead of FOMC. US stocks continue making new highs as strong earnings keep money flowing into equities ahead of the FOMC meeting on Wednesday. Dow (+0.39%), Nasdaq (+0.34%), S&P (+0.37%) and Russell (+0.16%) all at their all time highs while flights to safety were noticed. 10Y yields ticked lower 1.54% as Dollar climbed back above the 94 handle.

In the commodities market, crude was little changed at $84/bl as markets await the EIA report that is expected to show a rise in supplies. Gold retreated from the $1,800/oz handle as the Dollar strengthened ahead of the Fed’s meeting. Elsewhere, iron ore dropped further to $96.12/tn as news hit the wires that the new US infrastructure stimulus might not be passed.

In the FX space, flight to safety was noticed in the short and medium term accounts as Yen was flipped to demand, alongside Swiss, Dollar and Euro. The comdolls trio were sent to the back burner alongside Sterling as long term investors stayed put. Markets look to ADP employment reports, factory orders and more earnings reports from Alibaba (BABA), Electronics Arts (EA), Humana (HUM), Marathon Oil (MRO) and MGM Resorts (MGM) to name a few. The FOMC meeting and EIA petroleum status will be in the spotlight Wednesday.

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 (19% undervalued) with dividends yielding 3.03%, T (19% undervalued) at 8.24% yields and COG (CTRA) (13% undervalued) yielding 2.05%. CLVS is currently 19% overvalued with -7.19 z-score but Tudor Investment had stepped in recently and we decided to hold. We remain bullish with VIPS (44% undervalued with 5.59 z-score), GT (47% undervalued with 1.28 z-score) and CRON (14% undervalued with 9.18 z-score) while bearish GE (18% 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.