STATE OF THE MARKETS

Stocks up as Powell testifies. US stocks closed higher on Tuesday after Fed’s Chair Powell testimonies to US congress eases rate hike concerns. Dow (+0.51%), S&P (+0.92%) and Nasdaq (+1.41%) including Russell (+1.05%) all rebounded as more than $1 trillion flowed into US bonds futures of various maturities to take advantage of higher yields. The 10Y benchmark trimmed down to 1.75% as the Dollar index broke lower to the 95.50 minor handle.

In the commodities market, crude surged higher to $81/bl as worries over supply disruption from Kazakhstan took centerstage. Inflation concerns continue to press gold past $1,820/oz mark while iron ore past $126.75/tn as investors continue to position their assets in case of rising inflation.

In the FX space, overall sentiments seemed to improve with receding bids for the safe havens Yen and Swiss while more bids for Sterling, Loonie and Euro. On Wednesday, markets look forward to seeing the latest earnings report from Shaw Communications (SJR), Jefferies (JEF) and KB Home (KBH) as well as the very much awaited inflation reading. EIA petroleum status will be in the spotlight for energy traders.

OUR PICK – No New Stock Picks

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 (21% undervalued) with dividends yielding 2.98%, COG (CTRA) (15% undervalued) yielding 2.35% and averaged down on T (12% undervalued) at 7.90% yields. CLVS is currently 22% overvalued with -7.19 z-score but Tudor Investment had stepped in recently and we decided to hold. We remain bullish with VIPS (47% undervalued with 5.59 z-score), GT (41% undervalued with 1.28 z-score) and CRON (12% undervalued with 9.18 z-score) while bearish GE (14% overvalued with 1.43 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).

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.