STATE OF THE MARKETS

Dollar dived as stocks rallied. US stocks rallied on Tuesday as the Dollar continued to fall amid improved risk appetite. Dow (+0.78%), Nasdaq (+0.75%), and S&P (+0.69%) including Russell (+1.10%) all climbed higher but lower volume indicates that the rally is running out of steam as the 10Y benchmark stalled around the 179 basis points.

In the commodities market, crude was little changed at $87.50/bl as investors continue to assess the supply chain issue amid OPEC+ meeting this month end. Gold found a strong base at $1,800/oz as investors continue to see rising inflation in the coming years. Elsewhere, iron ore producers continue to ramp up prices to reflect rising costs. The commodity commanded $138.80/tn at spot while March delivery reduced to $137.75/tn.

In the FX space, short and medium term traders continue to bid the oversold Aussie, Kiwi,  sterling and Euro as Yen lost demand amid improved risk appetite. Long term sentiments were little changed.

On Wednesday, markets look for earnings reports from Meta platforms (FB), Abbvie (ABBV), Thermo Fisher (TMO), Qualcomm (QCOM), Novartis (NVS), T-Mobile (TMUS), Waste Management (WM), Boston Scientific (BSX), Metlife (MET) and Marathon (MPC) as well as the much awaited ADP employment figures. EIA petroleum status will be in the spotlight for energy traders.

OUR PICK – No New 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 (21% undervalued) with dividends yielding 2.91%, COG (CTRA) (16% undervalued) yielding 2.25% and averaged down on T (14% undervalued) at 8.52% yields. CLVS is currently 23% overvalued with -8.20 z-score but recent SEC reports showed institutional net buying and we decided to hold. We remain bullish with VIPS (45% undervalued with 5.98 z-score), GT (39% undervalued with 1.40 z-score) and CRON (21% undervalued with 9.18 z-score) while bearish GE (14% overvalued with 1.43 z-score). We have also locked profits for GE, GT and 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.