STATE OF THE MARKETS

Stocks rebound after Omicron sell-off. US stocks pared earlier losses from the sell-off on Friday, after investors shrugged off the new Covid variant, omicron – was reported highly transmissible but with mild symptoms. Dow (+0.68%), Nasdaq (+1.88%) and S&P (+1.32%) recovered from more than the 2% sell-off, but with mixed breadth as investors took a wait and see approach.

Flight to safety was noted with Dollar under pressure and yields lower with strong bids seen in precious metals. The 10Y fell back to 150 basis points while Dollar to the 96 handle as gold got strongholds at the $1,780 barrier.

In the commodities market, crude fell to as deep as $68/bl before bidders emerged to float the black gold back to $70.50/bl as investors waited for more updates on the variant. Flight to safety and inflation concerns saw gold on strong bids at the $1,780 barrier while iron ore continued to trend higher to $102/tn for December settlement as the US infrastructure bills continue to take shape.

In the FX space, long and medium term investors turned more bearish as Yen took the helm of demand from King Dollar after the Friday sell-off. Short term traders, on the other hand, scooped some bargains in the oversold Aussie, Kiwi, Euro and Loonie. On Tuesday, markets look for earnings reports from Ambarella (AMBA), Box (BQ), HP Enterprise (HPE), Jinko Solar (JKS) and Sales Force (CRM) while waiting for Fed’s Powell speech on policy.

OUR PICK – No New Pick

No new pick on highly volatile markets. With markets showing extra volatility due to the new Covid omicron variant, we decided to stay on the sideline for now.

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

Risk Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities/oz. 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.